Tag Archives: Goldman Sachs

This post is a little more rushed than usual so apologies in advance for typos, grammatical errors, issues of style, etc – I will most probably update this article after Sunday’s close with additional observations, videos, and so forth. Meanwhile, here are some prompt sketches based upon on-the-ground reports plus limited mainstream coverage of the event so far…

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Starters with frothy cream

Named after an obscure association with the French town, chateau and dessert topping, this “census-designated place” of 25,000 people in Fairfax County on the fringes of Washington DC is about to welcome a more controversial kind of cream: the secretive annual meeting of world leaders, CEOs, financiers and power brokers known as the Bilderberg Group.

“… a more controversial kind of cream” Ooh er missus!

This ham-fisted flattery heads an “article” (even within quotes “article” is generous) written by the obsequious Phil Hoad and shamelessly published in the Guardian on the eve of this year’s Bilderberg meeting. Titled “Chantilly in the spotlight: inside the secretive Bilderberg’s ‘home from home’” author Mr Toady continues:

In fact, Chantilly’s Westfields Marriott hotel, hosting this year’s meeting from 1-4 June, has become the Bilderberg’s home from home in recent times, having also served as the conference’s venue in 2002, 2008 and 2012. Sure to be in attendance are the scrum of protesters, alt-media, conspiracy theorists, Illuminati watchers and anyone else keen to see the world elite turn into lizards after supping blood out of the Holy Grail at midnight…

A glance left reveals how “the content” (scant as it is) “is supported by the Rockefeller Foundation”, although the piece itself makes no direct mention of David Rockefeller, a founder member of Bilderberg and, prior to his death in March, the most notorious of all the boring old patriarchs of the club. But then this “article” makes no mention of anyone connected to Bilderberg, and nor does it provide serious journalistic speculation on what this “critical mass of movers and shakers” might be doing other than:

… either benignly spitballing global policy or carving up the future between themselves (depending on your paranoia levels) …

Which is NOT journalism. It’s not even ‘fake news’, but totally fatuous and content-free dross. At one level, the whole “article” is brochure-speak: frothy and bland. On another, it is a snide if clumsy assault on what the author tacitly rejects: free and unrestricted investigative reporting. It doesn’t matter how or why “Bilderberg flies beneath the radar in Chantilly”; it just does – and more power to them! Whilst those who aren’t enamoured by the thought of this billionaire club mixing it (“in private”) with our senior politicians are evidently crazy, tinfoil hat wearing conspiracy theorist nutjobs who believe in alien lizards… so there!!!

Click here if you really want to read any more of this vacuous and execrable flimflam – but you are only encouraging more of it.

Alternatively, and for more considered thoughts on this whole alien lizard schtick, click here to read my extended review of last year’s meeting in Dresden.

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Appetiser: lightly grilled Bilderberger

One notable change at this year’s confab is the record number of attendees from inside our press and media ranks. During previous years there have always been a handful of house-trained “journalists” but the quota on this occasion exceeds 10% of the total cohort and includes…

Yet by observing the strict Chatham House Rules, none has actually gone to report on the inside scoop. And none of their excluded pressroom colleagues is there reporting from outside either. Charlie Skelton is again the lone mainstream maverick, and though Al Jazeera did send a small team, the real investigative work is being carried by a few freelance citizen journalists and alternative media outlets:

Indeed, as the Bilderbergers landed at nearby Washington Dulles International Airport, Luke Rudkowski of WeAreChange and Dan Dicks of Press For Truth were amongst the first on hand to greet them. And wisely, they had applied for passes granting permission to film, although notwithstanding such assiduous preparations, were soon detained by police in any case – repeatedly detained and released in fact. In between bouts of police harassment, they did manage to capture some interesting footage. Here’s what a few of the attendees had to say for themselves – they certainly love to talk about the weather:

Others preferred to keep tight-lipped:

Larry Summers was especially taciturn:

Whereas Canadian Finance Minister, Bill Morneau, did provide some comment:

A few were more talkative still – a video compilation is included in a later section.

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Main course with vampire squid

One of the lamest arguments for failing to scrutinise Bilderberg is that since everything takes place behind closed doors there’s nothing of real interest that is open for discussion. Aside from the self-defeating nature of this position, it is also inherently false. Indeed, as the public is increasingly becoming aware, there is a great deal that can be sieved and usefully filtered from anyone’s metadata. In this instance we might glean valuable information from who turns up, their associations with fellow attendees, not to mention any extant commitments to Bilderberg’s slimline though published agenda of “key topics”.

Here, for example, are a few connections quickly traced by Charlie Skelton that link up with aforementioned Canadian Finance Minister, Bill Morneau:

In the same spirit, it is certainly worthwhile to peruse Bilderberg’s official press release – this year it begins:

The 65th Bilderberg Meeting will take place from 1-4 June 2017 in Chantilly, Virginia, USA. As of today, 130 participants from 21 countries have confirmed their attendance. As ever, a diverse group of political leaders and experts from industry, finance, academia and the media has been invited. The list of participants is available here

The key topics for discussion this year include:

1. The Trump Administration: A progress report
2. Trans-Atlantic relations: options and scenarios
3. The Trans-Atlantic defence alliance: bullets, bytes and bucks
4. The direction of the EU
5. Can globalisation be slowed down? [their concern is it can!]
6. Jobs, income and unrealised expectations
7. The war on information
8. Why is populism growing?
9. Russia in the international order
10. The Near East
11. Nuclear proliferation
12. China
13. Current events

More jaunty than usual, and, when boiled down, there are about half a dozen strands of immediate interest. In fact, I strongly advise reading adjacent items as correlated pairs as follows:

i) Trump and Trans-Atlantic relations – as Charlie Skelton notes:

The White House is taking no chances, sending along some big hitters from Team Trump to defend their boss: the national security adviser, HR McMaster; the commerce secretary, Wilbur Ross; and Trump’s new strategist, Chris Liddell. Could the president himself show up to receive his report card in person?

Skelton continues:

Henry Kissinger, the gravel-throated kingpin of Bilderberg, visited Trump at the White House a few weeks ago to discuss “Russia and other things”, and certainly, the Bilderberg conference would be the perfect opportunity for the most powerful man in the world to discuss important global issues with Trump. 1

Say what you like about Bilderberg, but they’ve got a sense of humour. The agenda for this year’s secretive summit of the global elite is full of in-jokes. They get big laughs straight off the bat by describing themselves as “a diverse group of political leaders and experts”.

Writes Charlie Skelton in this year’s second report from his annual Bilderblog, adding:

Perhaps by “diverse” they mean that some of the participants own hedge funds, whereas others own vast industrial conglomerates. Some are on the board of HSBC, others are on the board of BP. Some are lobbyists, others are being lobbied. That sort of thing.

And Skelton’s “favourite joke” is, as he puts it:

“The war on information”. Bilderberg is concerned about fake news? The world’s most secretive conference, which is spending hundreds of thousands of dollars keeping the press away from its sacred discussions, which has spent decades lying and obfuscating about itself, wants to ensure the spread of truth?

As an illustration of their temerity, Skelton then points to the flagrant denial of the attendance of World Bank executive director, Fernando Jiménez Latorre, who was spotted on the backseat of a limo with Spanish Finance Minister, Luis de Guindos, although not listed amongst the attendees:

If Bilderberg wants an answer to “Why is populism growing?” – another question on the agenda – they might take a look in the mirror. It’s almost as if people aren’t all that comfortable with unaccountable technocratic elites and billionaire globalists lobbying their ministers and party leaders behind closed doors.

The optics are awful. To see Spain’s minister of the economy being locked away for three days with Ana Botín, the head of Banco Santander, Spain’s largest bank, while around them swirl Goldman Sachs executives, hedge fund owners and the secretary general of Nato, and then not see a press conference at the end of it … this might be part of the problem. 2

Click here to read Charlie Skelton’s full article entitled “Bilderberg: the world’s most secretive conference is as out of touch as ever”.

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Just desserts?

Surely the most eye-popping sentence in this year’s official press release is this one:

Founded in 1954 and chaired for the first twenty years by a former SS officer, the Bilderberg Meeting is an annual conference designed to foster dialogue between Europe and North America.

Just why, all of a sudden, did Bilderberg choose to remind the world of their own unsavoury origins? Candour is not the Bilderberg style, and neither is bravado. Yet this statement looks deliberately crafted to signify a new defiance. Dropping in a reference to their own Nazi connections and then immediately switching focus as if the whole matter is of no importance, serves as a sort of two-fingered salute to the rest of us.

But conceivably, this odd sort of swagger may be indicative of growing paranoia within the club: a boastfulness to cover the cracks as “the secret of rulers of the world” (according to Jon Ronson, many like to imagine themselves this way) are losing “the war on information” and with it their tight grip on public perception.

It could very well be that at the rotten heart of Bilderberg, the same “elites” who steered the political course of our post-war western societies, are now suddenly feeling the strain as a direct consequence their own dire socio-economic mismanagement. So are we witnessing signs of desperation just as the wheels of our financial-military-industrial complex, already creaking rather badly, start coming off altogether?

Or is this merely wishful thinking? Perhaps. The undoing of our horribly corrupt global corporatocracy, so painstakingly erected, is an urgent matter. For what has been christened a “new world order” by some within this same Atlanticist set is nothing but a twisted and ruinous simulacrum of true internationalism.

We are already in perilous times. Western democracy was hard won, and will be far harder to recover if we allow it to be stolen away again. At Bilderberg that theft is ongoing, as year on year the oligarchs and plutocrats gather to feast with their political counterparts, all greedy for power and influence. And every year there is less and less on our own plates. Is this what we deserve?

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Comments to Guardian “awaiting moderation”

A friend added the following comment to Phil Hoad’s pathetic puff piece:

Has no one noticed this Cities section is actually sponsored by The Rockefeller Foundation. I think that should tell you all you need to know about this article. One should question the author’s intent/collusion, and ask who paid for this article to be written?

And then this one:

Considering Rockefeller is a name integrally interwoven with the history of Bilderberg, it seems ironic that The Rockefeller Foundation actually sponsored this Cities section in which this article appears! Is this just a coincidence no one else has spotted?

Neither passed the scrutiny of the moderator. So much for “comment is free”.

This is what it must feel like to be on Death Row, to be waiting for the moment when the iron door clangs open for the last time and four burly guards escort you arm-in-arm to the room where your life will be extinguished. That same sense of dread hangs over the presidential election of 2016.

The growing sense of desperation in America today is palpable and it goes far beyond this one, isolated election cycle. The steady erosion of confidence in the nation’s main institutions is evident in Congress’s public approval ratings which seem to be stuck in single-digit territory. The public probably feels equal contempt for the Loretta Lynch Justice Department which is loaded with Clinton toadies that have done their best to quash any investigation into the illicit pay-to-play machinations at the Clinton Foundation. And, let’s not forget the media which has lost whatever shred of credibility it managed to salvage after its myriad of war-promoting lies about WMD, mobile weapons labs, aluminum tubes and Assad’s imaginary chemical weapons attacks, attacks that were invented from whole cloth at one of Washington’s many neocon think tanks where these fake ideas are typically hatched. The Forth Estate’s latest gambit is an idiotic attempt to prove that Vladimir Putin is trying to hack our thoroughly-corrupted Third World voting system to achieve some nebulous political gain. What a joke.

No, Hillary, Putin is not gaming the system like you did in the primaries with Bernie Sanders, nor did he put a gun to your head and force you to delete the 33,000 missing emails from your private server. That was your handiwork Ms. Clinton, although you have a done a masterful job in deflecting attention from yourself and passing the buck for your own sleazy, criminal activities onto Moscow.

[with links added]

Hillary stole the nomination, as Whitney reminds us, but what of Trump. The rise of Trump is more alarming again:

To large extent, Trump owes his shocking rise to the top of the GOP ticket to the fact that he shoots from the hip and that the media hates him. What was once a liability, has become an asset as trust for the despised media has plunged to depths never seen before.

But that doesn’t explain what’s really driving this election and why are the American people so overcome by desperation?

It’s all about economic insecurity. It’s all about the fact that standards of living are slipping, that an entire generation is bogged down with student debt, that all the good-paying jobs have been shipped to other countries, that family incomes are shriveling, that a good portion of the population feel threatened by immigration, that health care costs have skyrocketed, that retirement plans have been postponed, and that the great bulk of the nation’s wealth has been transferred to the 1 percent plutocrats and Wall Street landsharks who dictate policy through their Congressional lackeys and their allies at the Federal Reserve. That’s what the election is really all about.

People are waking up to the fact that the American dream is dead, that the US is no longer the land of opportunity, and that the lives of their children are going to be worse than their own, far worse. This is why everyone is so upset, so frustrated, so hopeless. They are looking for a political ally who will address their needs, and instead they get bromides on transgender bathrooms or “glass ceilings” or any of the other soothing slogans the Democrats use to pacify the masses and to keep them in the flock. Only now it’s not working as well. Now a sizable portion of the blue collar vote has shifted into Trump’s camp mainly because they see through the phony Democrat rhetoric and all the job-eviscerating free trade deals they’ve pushed for years. Trump has skillfully tapped into the collective psyche of millions of working people who feel the Democratic Party tossed them under the track-hoe 30 years ago and never looked back. And, he’s right, too.

Whitney then continues with a quote from Zerohedge that quashes any lingering doubts about whether or not billionare-man-of-the-people Trump might be Wall Street connected too:

But there was another big move that Trump made that escaped the notice of the media and which really underscores his willingness to “play by to the rules.” Here’s the story from Zero Hedge:

Six months ago, Steven Mnuchin became finance chair for the Trump campaign. Having successfully helped to raise 10s of millions of dollars for the campaign, the former Goldman Sachs partner and Soros Fund management employee is now positioned for something much larger as Donald Trump reportedly told his aides today that he wants Mnuchin to serve as his Treasury Secretary.*

[original highlight and links restored]

Whitney continues:

Another head of Treasury from G-Sax?

That figures.

Trump is great with the rabble-rousing “take back your country” tirades and all the gibberish about the “rigged” system. But he also knows how to cave in when it suits his interests. He knows he’s not going to be president without Wall Street’s nod, so he’s enlisted a trusted insider to take care of business at Treasury. It’s a signal to the bigwigs that they don’t have to worry about the Donald going off the reservation. (wink, wink) So much for Trump’s independence, eh?

Whittled down to a choice between Hillary and the Donald, it has long since been a choice between lesser evils – Alien vs Predator (I leave you to decide which is which). Here’s more on Clinton:

And what can we say about Hillary Clinton that hasn’t been said a million times before?

Clinton, who still holds a slim lead in most of the polls, is clearly the establishment candidate in a year when hatred for the corrupt Washington oligarchy, has reached levels not seen in the last hundred years. The fact that Hillary can run for the nation’s highest office while being investigated by the FBI, while being savaged by the daily releases of new, incriminating emails (from WikiLeaks), and while promoting a hawkish, neocon-driven foreign policy that portends a direct military confrontation with Russia, speaks to the fact that traditional liberal Democrats are either still hoodwinked by the Democratic Party’s manipulation of identity politics or simply terrified of the alternative, Donald Trump.

And that’s why everyone is so utterly dejected and depressed about the election, because instead of voting for a candidate they really want or admire, most people are simply voting for the candidate that either disgusts or scares the hell out of them the least. What kind of choice is that?

With Trump we face martial law in America, with Clinton, a nuclear war with Russia – not my words but the forecast of another disheartened American. As Mike Whitney concludes:

In less than 48 hours, the most agonizingly-wretched campaign of all times will be over, the ballots will be counted, and the new president will be named. The only thing that is certain is that, whoever wins, we lose.

Ironically, Trump has often criticized Clinton (and his former competitor Ted Cruz) for their links to the big banks:

“I know the guys at Goldman Sachs. They have total, total control over him. Just like they have total control over Hillary Clinton,” Trump said in one debate.

But as we noted previously, he had no qualms, however, in hiring one of the most prominent Goldman alums to raise money for him. […]

But for Trump, a self-professed “anti-establishment” candidate, who has repeatedly stated he is not “for sale to special interest groups”, his sudden call for the seemingly most “Wall Street” of Wall-Streeters to become Treasury Secretary may come as a big surprise to some and will leave many of his supporters demanding an explanation.

[highlights as in original]

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Additional:

On Wednesday 9th, John Pilger gave an extended post-election interview with Afshin Rattansi on RT’s Going Underground. The full show is embedded below alongside my own transcription of selected passages:

I think the only people surprised [by Trump’s victory] are those who enabled it to happen. I’m speaking about mainly, what I would call in the United States, a liberal class. To a certain degree in this country [i.e., Britain] a liberal class. They told us that only the status quo – only a corrupt, warmongering status quo – would be acceptable to the majority… They’ve created Trump in the same way they created Blair…

In the United States they corrupted a voting system within the Democratic Party that ensured that another populist, Bernie Sanders – I don’t think really he would have beaten Trump – but he was a populist. But instead, the corrupt candidate, the embodiment of the status quo, that has declared the whole world a battlefield was the “candidate of sanity”. “The candidate for women”. This grotesque campaigning for a candidate… who represented great rapacious power has been probably the most eye-opening side to this. I don’t think Trump is – you could see him coming a mile off. Or ‘a Trump’. [from 1:30 mins]

[Clinton] is clearly the embodiment of a corrupt system. She is the embodiment of a very warmongering system that has declared the world a place where it can go to war, wherever it likes. Where it can bomb agricultural communities in Yemen where half the children are malnourished. Where it can do what it likes in Syria. Do what it likes in Iraq. I think most of humanity… regards that kind of behaviour from the allegedly most powerful country in the world as abhorrent. And she has been the embodiment of that.

Now, whether Trump will be is an open question. He says he’s anti-establishment, but of course, he’ll come with his own establishment. He’s anti- their establishment; I don’t believe for a moment he’s anti- the wider establishment of the United States: indeed he’s a product of it. [from 3:50 mins]

The truth is there was no-one to vote for… there was perhaps Sanders earlier on. But he was a kind of minority populist candidate with a large following. But the system threw up those who could afford it: Trump had his own money; Clinton was backed by the Democratic Party. Clinton was backed by the arms companies – she was the only candidate that amongst her own backers included all but one of the ten leading arms manufacturers in the world. [from 5:20 mins]

They’re not journalists: they’re anti-journalists. One of the most revealing aspects of this has been the exposure of journalism. The exposure of journalism as an extension of that same corrupt established power that I’ve been speaking about. They’re not independent: they are echo chambers. They amplify and echo that which is handed down to them. And the worst, of course, the greatest echoes are the so-called enlightened, respectable, liberal press. The New York Times has become a kind of Cold War propaganda sheet with all the nonsense about Russia interfering in this campaign… The Guardian has given up. Yesterday, we had in the Guardian an article called the “Hall of Shame” by Jonathan Freedland in which he pointed the finger at a truth-teller like Julian Assange. As if he would be to blame if Hillary Clinton, this paragon of liberal virtue, was defeated. That’s grotesque. [from 7:10 mins]

The media along with The Pentagon, the CIA, the State Department and all the rest, including the Republican Party were Trump’s opponents. But they were the shouters… the BBC, CNN, as I mentioned, the Guardian, New York Times and you name it… they were all there because Hillary Clinton represented them. [from 9:10 mins]

But you know what has struck me is the silence. The silence of those with the facility, with the privilege, of being able to analyse and help us understand. To make sense of this extraordinary American year leading up to this extraordinary result. The silence, particularly of media, and particularly of the so-called liberal class, who have enabled so much of this. Their silence first of all about Iraq. Their silence about Libya. More than silence, their collusion with those dreadful events that are so described in Clinton’s emails…

You know, the emails that wikileaks published, that Assange spoke about the other day, really exemplify the very corruption. When you have a campaign manager of a candidate for the President of the United States [who] is the officially registered agent of Saudi Arabia. And that Saudi Arabia and Qatar are funding the Clinton Foundation, and Clinton as Secretary of State is approving arms sales (including the biggest arms sales in history) to Saudi Arabia and Qatar. [from 16:00 mins]

Something like 40% of the world in one way or another is under American sanctions. The EU usually follow on. The EU is not an independent collection of nations; by and large it follows the United States. Sanctions impose themselves on countries all over the world destroying life… infamously, destroying life in Iraq, killing according to UNICEF 500,000 infants under the age of five between 1991 and 2003. Sanctions led by the United States and Britain. [from 22:50 mins]

We live in Britain with the imposition of an extreme ideology with this awful name neo-liberalism… They hauled a perfectly good word out of the dictionary – “austerity” – and now that’s part of the ideology. All of it unnecessary in this rich country. The imposition of power on people’s lives is the issue today and in whatever form it has taken that’s what Americans – the majority of Americans – took to the ballot box with them. [from 25:00 mins]

We have in the Northern hemisphere up against the border with Russia the greatest build up of US-led Nato forces since World War II. In Asia and the Pacific we have the greatest build up of US naval forces since World War II aimed at China. We have something like eight or nine hundred US bases around the world, on every continent: 400 of them encircling China. Many more, I think, I haven’t counted lately because they keep cropping up, encircling Russia… I’m not saying that those who are doing this want nuclear war. Even they must understand that it would mean their own destruction. But this recklessness I’ve often felt could lead to the kind of mistake or accident that begins something.

And that is all about the imposition of power that comes from within the West. That is the issue. That’s the issue that this election campaign has thrown up and that’s the issue about which so many of those [in] the educated liberal class – those with the privilege of public platforms – have kept silent about. Keeping that out of the campaign in the United States has been a liberal exercise. Keeping it out of the reporting of the campaign in this country has been the same exercise. [from 26:10 mins]

I’m going to be honest with you. I’m horrified. I’m absolutely beyond myself. I had a 12-year-old daughter sobbing at home. We failed our young people. We failed generations to come… It’s a mirror up to our face as a nation, that this is who we are and who we have been. And anyone who has denied us that truth is why we are in the place that we are in right now. And we have a president right now who has access to executive orders. He has access to nuclear codes. He is going to appoint the next Supreme Court justice, which will live for generations after his presidency. I am appalled that I am sitting right now having to figure out how to explain to young people across this country, including my own children, why we have a sexist, misogynist, racist Islamaphobe in the White House. I’m just—I haven’t slept all night. I have no idea. I’m speechless.

Amy[Goodman], honestly, like I don’t care what anyone says. If Bernie Sanders was the Democratic nominee, we would have won this election by far. Michigan, we were down 20 percent in the polls in the primaries, and Michigan gave Bernie Sanders the biggest political upset in U.S. history. […]

Yes, he did, in Michigan. Who gave him that win? It was Muslims in Dearborn. We looked at—we looked at Dearborn this time around for Hillary. I’m going to be honest with you. Hillary wasn’t helping me. I went around the country talking an anti-Trump message, because I couldn’t bring myself to support her and be as a surrogate like I was for Bernie Sanders. War hawk, warmonger—people were worrying about what she would do in Syria, looking at her foreign policy. […]

What I want to say, Amy, is that this is a time for soul searching for the Democratic Party. They left young people out in the cold. They called us naive. They called us idealistic. They left Muslims out in the cold. Any time Hillary Clinton mentioned us, she said we were eyes and ears, we were on the front lines of countering terrorism. She never talked about us in any other way but as a law enforcement tool. And I’m honestly—I’m just waking up now, even though I haven’t slept. I’m outraged, not just at the fact that Donald Trump is the president. I’m outraged at the people who are going to put blame on black people and immigrants and Latinos voted more for Trump than they did for Mitt Romney, when, in fact, the blame that I want to put here is on the Democratic Party, because they are the ones that put me in this situation. [from 4:20 mins]

It’s incredibly striking, but also very alarming, how similar the path of Brexit was to the election of Trump, because just like with the U.S. election, in the U.K. during the Brexit debate referendum, British elites, outside of this kind of circle of populist, right-wing Murdoch types, pretty much were unified across ideological and party lines. You had the Liberals and the Labour centrists and the sort of more establishment Conservatives united in opposition to Brexit. And they essentially stayed online all day on Twitter telling each other how smart they were and praising each other’s columns, saying that Brexit was this grave threat and this unique evil. And the opinion class that is considered respectable, meaning not the right-wing tabloids, essentially unified, just like the opinion-making elites in the U.S., outside of Sean Hannity and Fox News and Ann Coulter, that wing of Fox News and that right-wing circle, were unified, as well. You had leading neocon intellectuals and establishment Republicans and then the sort of establishment liberal pundits all in agreement that Trump was this grave evil, constantly praising each other and citing each other in this endless echo feedback chamber.

And so, the people who were supporting Brexit and the people who were supporting Trump weren’t really ever heard from; they were just talked about in very contemptuous tones. These were the troglodytes. These were the uneducated idiots. These were the people motivated by malice and racism and xenophobia. And so they were sort of looked at like zoo animals, like things that you dissect and condemn.

And because this opinion-making elite was so unified, it led so many people, in both cases, to believe that their victory was certain. Nobody thought, in the opinion-making elite classes, that Brexit would win, and the same is true of Trump.

And then, both before and after you had this result, what you saw is not any notion of accountability. Why are there so many people wanting to leave the EU? Why are there so many people supporting this person so far outside the norm? No accountability, no self-critique. Only a way to distract attention from their own responsibility by just spouting hatred and disgust for the people who are being insubordinate.

We should reject wholeheartedly the fudge that David Cameron came back from Brussels with. He is asking the public to support staying within a reformed Europe, but he has deformed Europe in the process of creating this fudge.

says Economist and former Greek Finance Minister Yanis Varoufakis in response to the question “How should British voters who are dissatisfied with the EU view the referendum?”

He continues:

Yet at the same time we should also reject the Eurosceptic view that Britain should leave the EU, but stay within the single market. I have a lot of respect for Tory Eurosceptics with a Burkean view of the sovereignty of national parliaments. The problem is that they also support staying in the single market. This is an incoherent proposition: it’s impossible to stay in the single market and keep your sovereignty. 1

Which is surely a noteworthy admission (hence the bold emphasis) from the person most prominent in the left-wing half of the campaign to stay.

Click here to read more of the transcribed interview with Yanis Varoufakis in which discusses the launch of his new ‘Democracy in Europe’ movement (DiEM25).

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When Michael Chessum, a major organiser of the pro-Remain ‘Another Europe is Possible’ (AEiP) movement, is questioned about what concrete ‘changes’ he would like to see in EU, he simply dodges the question. Chessum’s behaviour generalises. To my knowledge, not a single supporter of Remain has presented a satisfying answer to the question of how we are supposed to go about reforming the EU. Even Yanis Varoufakis during his recent ‘Lunch with the Financial Times’ interview confessed that in reality the EU isn’t going to be reformed to anywhere near the extent the Remainers are hoping for (attempts to reform ‘will probably end in failure like all the best intentions’, he claimed). Even Remain supporter Ed Rooksby can write on his blog about how he is ‘not particularly convinced by arguments emanating from [AEiP] in relation to the possibility of transforming EU institutions in a leftist direction’. How is a new, reformed EU possible? How can we change it to break from the Washington Consensus? The answers are, worryingly, not forthcoming.

writes Elliot Murphy in a recently published Counterpunch article in which he deliberates on all sides of the EU referendum campaign.

Murphy’s case is not so much that a ‘Left Exit’ can be delivered, but that ‘Left Remain’ is replete with “airy-fairy proposals” and devoid of “any concrete solutions”. That, as he rightly asserts:

In theory, another anything is possible: Another New Zealand, Another Skelmersdale, Another Isla Nublar, Another Tamriel. It is not as if another EU is inherently unreachable, but rather that without any posited, realistic steps to achieve it, the hopes of the Remain camp will quickly dissolve after June 23rd, no matter which side wins. 2

More from Murphy later.

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On February 18th, an assorted group of prominent and not so prominent leftists including Caroline Lucas PM (Green), Cat Smith MP (Labour shadow minister for women), Marina Prentoulis (Syriza UK), Kate Hudson (Left Unity), Michael Mansfield and Nick Dearden put their names to a letter that appeared in the Guardian outlining reasons to get solidly behind what they describe as “a radical ‘in’ vote” to Europe:

Our campaign will put the case for staying in the EU independently of Cameron and big business, opposing any part of a “renegotiation” that attacks workers’, migrants’ or human rights. We will combine campaigning for an in vote with arguing for an alternative economic model, maintaining European citizens’ rights to live and work across the EU, and for far-reaching democratic reforms of European institutions. 3

Behind the initiative was a newly-fledged campaign group Another Europe is Possible that one of the lesser known signatories above, Luke Cooper, lecturer in politics at Anglia Ruskin University, helped to establish. In a related piece published a fortnight earlier [Feb 4th], Cooper prepared the ground for the campaign launch on the openDemocracy website. Titled “A different Europe or bust”, Cooper of course makes the case for staying, although he is also quick to concede:

None of us support the status quo; we all recognise radical institutional and political change is needed. Most of us also know, however, that a British exit would leave workers even more vulnerable to a Tory government and would not be a step towards the social Europe we believe in.

Continuing:

Rising nationalist sentiment, the structurally embedded neoliberalism of Eurozone institutions and the new downturn in the global economy all create a significant challenge for how to go about constructing an alternative. Taken together they require the left to construct a political alternative that is, firstly, bold and radical enough to address the systemic causes of the current crises and, secondly, rejects the illusion that a retreat into competing protectionist states offers even a partial answer. 4

What Cooper and others on the left are advocating then is a fresh start to Europe – a plan B:

[B]reaking with austerity and constructing a European new deal based on ecologically sustainable investment in jobs and growth. 5

As a cautious but committed internationalist, I have a great deal of sympathy with their position. Undeniably Europe needs a fresh start founded upon an economic ‘new deal’ that can halt a disastrous economic decline and rescue the poorest partner nations. To be nitpicking, however, such vitally needed investment must be injected into infrastructure projects and to boost productive capacity rather than less intangibly into “jobs and growth”. Without productive activity, creation of “jobs and growth”, irrespective of ‘sustainability’, will not secure long-term economic prosperity.

But the significant and most probably insurmountable difficulty is here comes in the shape of the EU institutions themselves. For these undemocratic institutions are not merely disinclined to make the sorts of ‘new deal’ investments required, but staunchly antithetical to ‘bailouts’ of every kind other than those needed to keep afloat the “too big to fail” banks.

Moreover, without a fleshed out programme of demands for genuine reform, these sorts of advocacy for ‘a better Europe’, are dangerous exercises in building castles in the air. For whose purpose does it really serve to say that although the EU is a monster (as Varoufakis has many times described it) we might coax it into better behaving itself when we have literally no firm ideas on how to force a change? Worse, since beneath the veneer of wishful optimism runs a deep vein of fear-mongering hardly less noxious than in the official Tory-led ‘Remain’ campaign:

A vote to ‘leave’ will not create the political space for a socialist Europe. The fragmentation of the EU would be on a right-wing, intolerant and nationalist basis. It would be a Europe of Le Pen, Farage, Orban and others on the right.6

Taken from a strident and hectoring post from Left Unity in support of the Another Europe is Possible campaign. The same post ends with words from Felicity Dowling, Left Unity’s Principal Speaker, who says:

‘We stand with those who have most to lose in the EU referendum campaign: with the children of workers who have lost child benefit, with the migrants who face further unjust vilification as the debate rages.

‘We stand with the tens of thousands fleeing war in Syria, Iraq and elsewhere.

‘We stand together with British and European workers.’

It follows by omission (presumably) that whoever wishes to leave, therefore, does NOT stand with the refugees or the British workers. That by default we stand in opposition to both. Indeed, if judged by Dowling’s list then our dereliction is so grievous that a vote for Brexit is tantamount to voting National Front…! 7

As reader Liz Langrick wrote in a heartfelt response to that Another Europeletter in the Guardian:

Your pro-EU stance seems to suggest that leaving the EU is a preoccupation of the Tory right and all voters of the centre-left should be pro-EU because it somehow represents progressive politics and is a vague force for good. But this is a huge betrayal of the sections of society you purport to speak for.

Adding:

Quite clearly an unlimited supply of low-skilled labour – which is what freedom of movement represents – makes it ever easier for employers to offer zero-hours or insecure employment, both for migrants and for British low-paid. This is benefiting only business owners not known for their public-mindedness or even paying any tax. How can anyone on the left be in favour of a system that perpetuates this? Any improvements to workers’ rights the EU may have secured have been and will continue to be fundamentally undermined by this, and arguing that we can change this from within is pie in the sky – as the difficulties Cameron’s negotiations have encountered clearly show.

And aside from the economic impacts on the poorer sections of society, it’s ironic that those on the left, particularly Labour MPs, support membership of an organisation that is so deeply undemocratic and undermines the role of ordinary people in the law-making/representation process.

So please stop clinging to the idea that the EU is progressive and therefore we must stay in at all costs. The EU is fundamentally driven by the demands of Germany and France. 8

To which I simply wish to add a single, small, but important, caveat. The EU is not driven much if at all by the demands of either the French or Germans, presuming that we are speaking of the French and German people (and if it were, then it would bear a better semblance to democracy). It is instead an apparatus serving corporate interests, the most powerful of which are the major banks. So for “Germany and France” it is better to read: Deutsche Bank, BNP Paribas and Société Générale.

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I shall conclude with a more extended quote from Elliot Murphy’s excellent Counterpunch article which details a few of the many intractable obstructions to this envisaged “Plan B” – meaning reform in favour of social justice, labour rights and a genuinely more equal society – for the European Union:

This groundswell of support for Remain across substantial parts of the Left is hard to square with the facts. State aid to declining industries, along with renationalisation, are not permitted by current EU laws (under directive 2012/34/EU), and any mildly progressive government which managed to get elected in 2020 would be hindered from the outset by the EU. Considerable reforms of the energy market would also be illegal under EU directives 2009/72EU and 2009/73/EU. Collective bargaining is becoming much weaker across the EU, most vividly in France and Germany.

McDonnell’s plans for People’s Quantitative Easing? Outlawed by Article 123 of the Treaty on the Functioning of the European Union. The series of anti-trade union laws introduced in Britain over the past few decades? The EU has no qualms with these whatsoever, showing no interest in providing even modest forms of protection for workers.

As the Labour Leave campaign points out, the EU would also outlaw an end to NHS outsourcing, tougher measures on tax avoidance, and general improvements to workers’ rights. The soft Left’s talk of international solidarity and the brotherhood of man in relation to the EU is absurd, especially as it continues to drive forward deeply militaristic and undemocratic (or rather, anti-democratic) policies. The EU is, after all, one the world’s major post-war imperialist projects, boasting an inherently and aggressively exploitative relation with the global South. The entirety of the EU parliament could be filled with McDonnells and Iglesias’s and no substantial reform would be forthcoming: The parliament is an institution purely of amendment and all power lies with the civil servants and the unelectable Commission.

And while Cameron, Johnson, Gove and Osborne are not the most admirable men in the world, they cannot be blamed for everything: It is the EU which has been hindering a just and lasting resolution to the refugee problem, not the UK state. A Left argument for Leave is firmly grounded not in the Left Remain camp’s ‘politics of hope’ (Owen Jones’s terminology), but rather in a well-earned sense of pessimism. As Chris Hedges recently told Vice: ‘This kind of mania for hope, that has infected even the Left, is a political pacifier. You know, everybody is addicted to these happy thoughts, and that keeps us complacent’. 9

This year’s Bilderberg meeting is about to kick-off in Dresden today, and in one of Charlie Skelton’s preliminary sketches published on Monday [June 6th], he speculates on how the men behind the police cordons, the “the high priests of globalisation” as former attendee Will Hutton described them, are viewing the prospect of Brexit:

“A disaster for everyone” is how Henri de Castries [the Chairman of the group], the boss of AXA and a director of HSBC, describes Brexit. But in particular, it is a disaster for his banking and big business colleagues at Bilderberg. Thomas Enders, the CEO of Airbus, who sits on Bilderberg’s steering committee – the group’s governing body – said, in a recent interview with CNBC, that his industry would be “lobbying” against Brexit. […]

Goldman Sachs has two senior representatives on Bilderberg’s steering committee: James A. Johnson, a board member of the bank, and Robert Zoellick, the chairman of Goldman Sachs’ board of international advisors. We know from Charity Commission accounts that Goldman Sachs, along with BP, is one of the key funders of the group, and we also know that they’ve been pumping “a substantial six-figure sum” into the Remain campaign. And Goldman Sachs doesn’t spend money lightly. The Remain campaign is clearly close to whatever they have instead of a heart.

For Bilderberg, as for Goldman Sachs, the idea that there might be any kind of push-back against globalisation is a horrific one. I suspect we’ll glimpse some frowning faces behind the tinted glass as the limousines start rolling up on Thursday.

As Skelton concludes:

The prospect of Brexit “frightens me”, admit Ken Jacobs, the head of Lazard, and another member of Bilderberg’s inner circle. Not much frightens these people. Only two things: sunlight and Brexit. 10

7Here is my own comment which you can also read by following the link:

With due respect, the choice as you present it is a false one. Firstly, voting to stay inside the EU will automatically mean assenting to Plan A – there is no Plan B. On the other hand, there are many reasons to vote to leave the EU (not mentioned above) that have nothing whatsoever to do with building walls and a fortress Europe – which is something happening in the extant EU. As is the financial ruin of Greece, Spain, Portugal and Ireland. And as is TTIP.

The EU is a technocracy run at the behest of the corporations and big finance that urgently needs to be undone. The current disintegration of Europe is happening largely because of policies of the EU. Certainly the nations of Europe must survive, but if this to happen then it may be necessary for the EU to perish.

Since the Greek people registered their defiant “no to austerity” at last weekend’s plebiscite, like many, I have been struggling to understand what that vote really means and where this is now heading both for Greece and the rest of the Eurozone. In searching for answers I have found that three different questions are inclined to separate out; questions that involve one another in a vaguely hierarchical fashion a little like Russian dolls. I have therefore decided to try to address each of these nested questions in turn beginning with the outermost first.

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1. Whose fault? (and who should pay?)

“The Greeks have been living beyond their means for years,” said one man, visiting Berlin from Osnabrück, Lower Saxony.

“I used to play in a volleyball team in the 1970s and 80s and we traveled all over the world. I’ve been to Istanbul and I’ve been to Brasil and I’ve never seen a country like Greece.

“The people there simply don’t work enough. I’d see them crowding cafes at four o’clock in the morning.”

“I’m completely on the side of the CDU [Christian Democratic Union]. Where has all the money gone? We pay our taxes, they don’t.” 1

The quotes above were part of an article sent to me by a friend living in Germany – a friend who happens to spend the other half of his time living in Greece. The remarks, he says, perfectly exemplify the sorts of opinions he most frequently hears. The Greeks caused the crisis, they should pay what they owe, and follow the rules like the Germans would. It’s all exceedingly simple, and all extremely badly informed.

Like many ‘good Europeans’, the German people are being held hostage to two falsehoods. One is that the crisis came about primarily because of indolence, inefficiency and impropriety. Put baldly, that Greeks are a bunch of lazy tax cheats. The only part missing here is the word untermensch; the tinge of latent bigotry is unmistakeable.

I have argued against this nonsense many times and so it pains me to have to repeat myself at all. But the facts are there for anyone who cares to look. Figures that unequivocally prove that Greeks work extremely hard: harder on average in fact than Germans do. Their productivity is lower and so perhaps there is an issue over efficiency, and tax revenues are indeed harder to secure, but this is very much a problem that gets far worse as you climb the social ladder (as it does in every society).

In any case, none of this was the actual cause of the Greek “debt crisis” – an offshoot of the wider banking crisis – which in fact originated because corrupt government officials negotiated with corrupt EU officials (unless we believe it takes only one to tango), helped along by corrupt men at Goldman Sachs, when Greece signed on to the euro. None of this will come as news to those who have followed the story closely, even if it is suddenly back in the newspapers again:

Goldman Sachs faces the prospect of potential legal action from Greece over the complex financial deals in 2001 that many blame for its subsequent debt crisis.

A leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank.

The Independent has learnt that a former Goldman banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the Greek government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid Goldman to secure its position in the single currency.

The development came as Greece edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency. 2

Click here to read the full article in yesterday’s [July 11th] Independent.

The second lie is that the Greek people have ever been bailed out at all:

Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.

Most of the money went to the banks that lent Greece funds before the crash.

That comes from a Guardian article, which goes on to point out (as many others have previously done):

Less than 10% of the bailout money was left to be used by the government for reforming its economy and safeguarding weaker members of society.

Greek government debt is still about €320bn, 78% of it owed to the troika. As the Jubilee Debt Campaign says: “The bailouts have been for the European financial sector, while passing the debt from being owed to the private sector to the public sector.”3

Yes, more than 90% of the bailout money went straight back to the creditors – much of it German money to prop up German banks.

As Paulo Nogueira Batista, one of the Executive Directors of the IMF, has recently admitted:

“One of the major problems of the programmes that were proposed was that they [“the Troika”] put too much of a burden on Greece and not enough of a burden on Greece’s creditors. So for example, the first programme of 2010 was presented as a bailout of Greece, but in reality it was more of a bailout of the private creditors of Greece. Greece received enormous amounts of money but this money was used basically to allow the exit of, for example, French banks [and] German banks…”

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For a more complete analysis, I refer readers to a previous article based around two excellent documentary films made by Harald Schumann and Árpád Bondy. The second of these, On the Trail of the Troika, was first broadcast on March 9th 2015 on ARD (German Public TV) as Macht ohne Kontrolle – Die Troika and has since been uploaded on youtube with both English and Greek subtitles. It is embedded below:

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Parallel to this overarching question of who is responsible for the debt is the question of who should now repay it. To the (wo)man on the street – and especially those auf der Strasse – this tends to be treated as if it were the self-same question, but it isn’t, and for the simple reason that a debt that cannot be repaid will never be repaid. In ordinary life we know this is true, which is why in our private lives we are disinclined to lend money other than to those we most trust. After all, it is very much the responsibility of every creditor to lend their money wisely, and this applies to banks and global institutions no less than it applies to you and me. But there are also international laws determining the legitimacy of debts.

In the case of Greece (and the other Eurozone debtor nations including Spain and Portugal), it is well known that the debts cannot possibly be repaid (as the IMF has recently conceded – for more information see my update on the previous post). There are also grounds for arguing that much of the debt is odious, and so the Greek government is not only justified but legally sanctioned to repudiate all such illegitimate debt:

A committee convened by the Greek parliament has claimed much of the country’s debt of 320bn euros was illegally contracted and should not be paid.

Following an official parliamentary investigation, speaker Zoe Konstantopoulou described the debt as illegal, illegitimate and odious.

Added to this, we also have the postwar precedent set by Greece and Spain amongst others when many nations agreed to the cancellation of German war debts thanks to the London Debt Agreement of 1953:

Needing a strong West Germany as a bulwark against communism, the country’s creditors came together in London and showed that they understood how you help a country that you want to recover from devastation. It showed they also understood that debt can never be seen as the responsibility of the debtor alone. Countries such as Greece willingly took part in a deal to help create a stable and prosperous western Europe, despite the war crimes that German occupiers had inflicted just a few years before.

The debt cancellation for Germany was swift, taking place in advance of an actual crisis. Germany was given large cancellation of 50% of its debt. The deal covered all debts, including those owed by the private sector and even individuals. It also covered all creditors. No one was allowed to “hold out” and extract greater profits than anyone else.

That comes from an excellent article written by Nick Dearden published in the Guardian. As Dearden points out, although this London deal helped pave the way for Germany’s “economic miracle”, the same remedy is entirely withheld from today’s debtor nations whether inside or outside the Eurozone:

The German debt deal was a key element of recovering from the devastation of the second world war. In Europe today, debt is tearing up the social fabric. Outside Europe, heavily indebted countries are still treated to a package of austerity and “restructuring” measures. Pakistan, the Philippines, El Salvador and Jamaica are all spending between 10 and 20% of export revenues on government foreign debt payments, and this doesn’t include debt payments by the private sector.

If we had no evidence of how to solve a debt crisis equitably, we could perhaps regard the policies of Europe’s leaders as misguided. But we have the positive example of Germany 60 years ago, and the devastating example of the Latin American debt crisis 30 years ago. The actions of Europe’s leaders are nothing short of criminal. 5

Unfortunately, today’s neo-liberal belief holds that debt is sacrosanct. So that whereas West Germany was only required to pay for debts out of its trade surplus, and thus its creditors had a vested interest in wishing to see economic growth, the creditors in the current crisis demand their pound of flesh irrespective not only of broader social consequences, but seemingly even of their debtors ability to keep up with repayments.

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2. To Grexit or not to Grexit?

The debate over whether Greece would be better inside or outside of the Eurozone has been ongoing for just as long as the crisis itself. And once again, we can break the argument down into component parts, of which one claim is that the Eurozone per se was an inherently flawed concept that remains utterly unworkable in its current form. This is very possibly the case, although not a subject I feel comfortable discussing – it is beyond my technical understanding. However, whether the Eurozone is ultimately workable or not, and regardless of whatever costs to democracy and national sovereignty might be needed to completely fix it, we can certainly see that this current crisis did not arise from the formation of the monetary union.

Rather, this so-called “debt crisis” began as a banking crisis, and one that can be easily traced back to the American subprime mortgage crisis, the origins of which again, in reality trace back to the financial deregulation begun under Thatcher and Reagan, and then continued by Clinton, Blair and Brown. The subprime mortgage/banking crisis of 2008 never truly ended, and the western financial system only limps on thanks to sporadic bailouts, unlimited QE and zero interest rates. Better understood, and as already discussed above, the so-called bailouts of Greece have been little more than a continuation of the earlier banker bailouts.

Leaving aside the more technical or purely political considerations, the decision facing the Greek government to stay or exit the Eurozone is rather more straightforward. It is a question of economic expediency – and for millions of people, this is quite literally a matter of life and death. So here is what I wrote more than three years ago (it reveals just how little in the debate has actually shifted):

Should the Greeks submit to further the “austerity measures” that have already destroyed their economy and social infrastructure as Angela Merkel and others are demanding, or should they drop out of the Euro and begin tackle their debt crisis by returning to a hugely devalued Drachma? These are the only available choices, as we are all, Greeks included, constantly reminded. […]

So what of the second option – the one that already has the stupid text-style name of Grexit? Should Greece abandon the Euro altogether? Well, firstly, the Greeks cannot be forced to drop out of the Eurozone – or at least there is no recognised mechanism for expelling any member nation. Secondly, it should be noted that the Greek people don’t want to leave the Eurozone. Like most of the peoples of Europe, these days they are broadly enthusiastic about the European project. Added to this, they also clearly recognise the serious risks of trying to suddenly go it alone in such perilous times. Once isolated, the Drachma would be mercilessly attacked by the same predatory banks and hedge funds that are currently threatening to bring down the Euro. The Drachma wouldn’t stand the ghost of a chance.

Which brings us to an impasse. Accept “austerity” or get out! Jump off a cliff or suffer slow death by a thousand cuts. Is there really no genuine alternative for the Greeks?

Yes, Greece could exit, following which it makes perfect sense, of course, to default, and in which case to default absolutely. With financial support offered from elsewhere (the new BRICS bank being the most likely source) they might revert back to the drachma, a move that would instantly improve competitiveness. Grexit would be a shock, but with genuine investment in productive activity and with exports suddenly buoyed by a devalued currency, Greece would survive and steadily grow. Or at least this is how the arguments in favour of Grexit go. And they sound like a pleasant dream. The passing storm, though intense, is quickly over. So if Grexit is so survivable, then what’s been the hold up…? Here is recently ousted Greek Finance Minister, Yanis Varoufakis, laying out the difficulties that would lie ahead:

The threat of Grexit has had a brief rollercoaster of a history. In 2010 it put the fear of God in financiers’ hearts and minds as their banks were replete with Greek debt. Even in 2012, when Germany’s finance minister, Wolfgang Schäuble, decided that Grexit’s costs were a worthwhile “investment” as a way of disciplining France et al, the prospect continued to scare the living daylights out of almost everyone else.

By the time Syriza won power last January, and as if to confirm our claim that the “bailouts” had nothing to do with rescuing Greece (and everything to do with ringfencing northern Europe), a large majority within the Eurogroup – under the tutelage of Schäuble – had adopted Grexit either as their preferred outcome or weapon of choice against our government.

Greeks, rightly, shiver at the thought of amputation from monetary union. Exiting a common currency is nothing like severing a peg, as Britain did in 1992, when Norman Lamont famously sang in the shower the morning sterling quit the European exchange rate mechanism (ERM). Alas, Greece does not have a currency whose peg with the euro can be cut. It has the euro – a foreign currency fully administered by a creditor inimical to restructuring our nation’s unsustainable debt.

To exit, we would have to create a new currency from scratch. In occupied Iraq, the introduction of new paper money took almost a year, 20 or so Boeing 747s, the mobilisation of the US military’s might, three printing firms and hundreds of trucks. In the absence of such support, Grexit would be the equivalent of announcing a large devaluation more than 18 months in advance: a recipe for liquidating all Greek capital stock and transferring it abroad by any means available. 6

All of which supplies reasons enough to be cautious. However, the problem does not end with the reprinting of the drachma. Because by allowing Greece a comfortable ride, whether via any means of exit from the Eurozone or else through debt restructuring, a precedent will be set that those in the other debtor nations would be keen to emulate. Which means that Germany (as well as the EU Commission) have, as Varoufakis very candidly puts it, “an interest in breaking us”:

This weekend brings the climax of the talks as Euclid Tsakalotos, my successor, strives, again, to put the horse before the cart – to convince a hostile Eurogroup that debt restructuring is a prerequisite of success for reforming Greece, not an ex-post reward for it. Why is this so hard to get across? I see three reasons.

One is that institutional inertia is hard to beat. A second, that unsustainable debt gives creditors immense power over debtors – and power, as we know, corrupts even the finest. But it is the third which seems to me more pertinent and, indeed, more interesting.

The euro is a hybrid of a fixed exchange-rate regime, like the 1980s ERM, or the 1930s gold standard, and a state currency. The former relies on the fear of expulsion to hold together, while state money involves mechanisms for recycling surpluses between member states (for instance, a federal budget, common bonds). The eurozone falls between these stools – it is more than an exchange-rate regime and less than a state.

And there’s the rub. After the crisis of 2008/9, Europe didn’t know how to respond. Should it prepare the ground for at least one expulsion (that is, Grexit) to strengthen discipline? Or move to a federation? So far it has done neither, its existentialist angst forever rising. Schäuble is convinced that as things stand, he needs a Grexit to clear the air, one way or another. Suddenly, a permanently unsustainable Greek public debt, without which the risk of Grexit would fade, has acquired a new usefulness for Schauble.

What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.

Because Finance Minister Varoufakis knows the economic field of game theory, lazy pundits have for months opined that he is playing “chicken” or “poker” or some other game. In Heraklion two weeks ago, Varoufakis denied this as he has done many times: “We’re not bluffing. We’re not even meta-bluffing.” Indeed there are no hidden cards. The Greek red lines – the points of principle on which this government refuses to budge – on labor rights, against cuts in poverty-level pensions and fire-sale privatizations – have been in plain view from day one. 7

As we await the decision of the Eurogroup, much of the mainstream media has been quick to draw attention to what it describes as the Greek government ‘climbdown’. So we hear how they have backed down on taxation, on pensions, on public spending and on privatisation. Following on from the dramatic “OXI” vote of last Sunday, it is quite easy to feel deflated by this. Indeed, the harshest critics of Tsipras (Varoufakis is out of range) – critics both from left and right – say that Syriza have managed to let a ‘no’ slip into a ‘yes’.

But then the voices that dominate the mainstream media have an axe to grind; the usual neo-liberal axe. So when they play up Syriza’s ‘climbdown’ we should look rather carefully into the details (I will offer further thoughts on this at the end). Meanwhile, the alternative voices who say that Greece ought to have followed Iceland’s example are missing a great many points of significant difference between the two nations: the size of populations, the make-up of their respective economies, and the rather important fact that Iceland were never part of the Eurozone or stuck in any kind of currency union.

Professor Steve Keen, who is Head of the School of Economics, History and Politics at Kingston University in London and author of Debunking Economics, put the whole matter into a useful context in an interview he gave on George Galloway’s RT show Sputnik [also July 10th]. Greece’s position is exceptionally weak and isolated, Keen says, so when it comes to Grexit:

“[Syriza] are afraid of the transition. And they are afraid of just how viable they are going to be once they are back on a floating exchange rate again. But I don’t think they’re going to have a choice.”

And as for how well Syriza have played their hand, Keen replies:

“Well, Yanis won’t mind me saying this now. He wrote to me saying they’re basically… we’re being subjected to a putsch. And he said, basically the attitude of the European Union was that they didn’t want Syriza to win, so let’s get rid of them. There was a political campaign right from the outset to break their backs and to either force them to become like the party they replaced [i.e., Pasok] or to drive them out of office. And in that sense the referendum was quite a surprise move – [the opponents of Syriza] weren’t expecting it – and now, of course, they’re treating it as though it didn’t happen… You did well. It’s a pity you voted the wrong way. But apart from that congratulations on winning. Now let’s go back and do exactly what we were doing last week.”

But if, as Steve Keen, Yanis Varoufakis and many others fear, the talks do indeed fail, and if only because Germany (principally) refuses to budge, then those who have called for Syriza to look for alternatives sooner will feel vindicated. However, in response to this, it needs to be pointed out that although Syriza may fail to stall a Grexit, during the six months they have unquestionably strengthened their position politically. In Greece, rather than shrinking away, their popularity has grown, which is vitally important if you are keen to maintain your democratic mandate. Outside of Greece, Syriza has also been winning hearts and minds. By contrast, and in spite of whatever else happens next, the reputation of the EU has certainly been damaged. As Steve Keen says:

“They [Syriza] can survive being pushed out of the euro… one thing you can pick up from the Greek reaction to that election was that there’s a sense of pride come back. Because being put through an experience like that – people talk about they’re responsible for the situation [and so] they should pay the price (I’ve heard that amongst some of my Conservative friends recently). They don’t realise just how long the punishment has been. Just how severe and just how demoralising it is to have no sense of a future, which is why the suicide rate has increased by a factor of five or six in Greece since this whole thing began.”

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There is, however, an alternative argument against Alexis Tsipras and Syriza that is more incriminatory, and it is one that has followed both since long before the party had even been elected to power. In short, it is the opinion that Syriza itself is phoney, or if not Syriza as a whole, since this is a leftist coalition of different factions, then its leader Tsipras along with former Finance Minister Varoufakis – indeed, some go so far as to insinuate that both Tsipras and Varoufakis have been nothing less than saboteurs…

The World Socialist Web Site calls on Greek workers not to give any political support to Syriza. There is no party in this election that represents the interests of the working class.

That was the position of the International Committee of the Fourth International (ICFI) as outlined on their website wsws.org on the eve of the Greek elections.

Having been ignored by the Greek people, the World Socialist Web Site, courtesy of International Committee of the Fourth International, then followed up with this:

It took just hours for the leftist pretensions of Syriza, (the Coalition of the Radical Left) to be exposed following its victory in Sunday’s Greek general election.

On Monday morning, Syriza leader Alexis Tsipras held talks lasting barely an hour with Panos Kammenos, leader of the right-wing, anti-immigrant Independent Greeks (ANEL). Following the talks, Kammenos announced that the Greek government would be a Syriza-Independent Greeks coalition.

Syriza had been caught red-handed, but it gets worse:

Syriza’s coalition with ANEL was prepared well in advance. In March 2013, Syriza entered into a “front” with ANEL based on efforts to save the Cypriot banks with aid from the European Union (EU).

Following Monday’s talks, the Protothema newspaper reported that “Syriza and ANEL have already reached an agreement on the issue of the Greek president and ANEL’s red lines on national issues will be respected by its leftist coalition partner.”

Was this true? Well, yes. In fact, my good friend from Germany who was then living in Naxos told me that people in Greece had been perfectly well aware of this alliance and that no-one was especially bothered. It is a marriage of convenience. But why believe me? This is what Stathis Kouvelakis, a prominent member of Syriza, said of the coalition with ANEL:

This alliance has been, I’m afraid, a forced and quite pragmatic type of choice, devoided of any grand strategic design. And since Syriza’s offer of an alliance with the other force of the radical left has been categorically rejected by the latter, this possibility has been explored since a while and was therefore easy to materialize once the election result was known.

Click here to read more at Richard Seymour’s popular blog Lenin’s Tomb.

Now everyone is perfectly entitled to their opinion about Syriza and Alexis Tsipras. If they believe that they are fakers then they should say so. But there is something deeply self-destructive about certain elements within the left. The reason is simple. For half a century and more as the left has been remorselessly beaten into submission by very powerful corporate and oligarchical interests, this sustained period of bruising defeats has created a feeling of resignation and a loser mentality, creating schisms that were so memorably lampooned by Monty Python’s Life of Brian.

But there’s also another point that desperately needs hammering out, which is the radical left’s obsession with intellectual legitimacy. Marxists, Trotskyists, and even Maoists (the madness of some on the far left simply knows no bounds!) who scrutinise and disparage one another over matters of conjectural doctrine, dismissing rival camps on grounds that alternative interpretations to their own are pseudo- and bourgeois. Meantime, the world moves on, and beyond the narrow confines of these inner party squabbles, there is no effect whatsoever on any practical advancement. The bigger joke being there are few preoccupations even half as petty-bourgeois as splitting hairs over Marx and Engels; one the son of a Jewish lawyer, the other the eldest son of a wealthy German cotton manufacturer.

For few in the proletariat care one jot for the ideological legitimacy of the left (or the right for that matter) – and why would they? They have more pressing concerns like putting food on the table and a roof over their head: a reliable income and fortnight’s holiday abroad are the main concerns of the ordinary Joe. Surely then, those on the left, especially the radical left, ought to strive to put programme above dogma. Since the masses, however miserable, will never be roused and politically animated by dry theory. And isn’t this where the revolution is expected to spring forth from?

For so long as the left keep bickering on about who is more properly socialist, then the right will easily steal in. Because the right, especially at its vilest extremes, is devoid of the same intellectual hang-ups, which is why, even when their closet intention is to coerce and oppress the poor and the workers by means of sectarian division, the right manages to gain so much traction amongst the ranks of the lower classes. The left needs to learn this lesson quickly; those self-aggrandising gangs of thugs like Golden Dawn are sharpening their knives and once Syriza are seen to have failed, the next act may be a diabolically familiar one.

*

Additional: Playing the long game

Greece will hold a referendum on a new European Union aid package intended to resolve the country’s debt crisis, Prime Minister George Papandreou says.

That was November 2011 and the BBC news report continues:

Analysts say a referendum could derail the wider deal on the euro debt crisis.

Adding:

Opinion polls in Greece show that most people do not support the austerity deal. 8

Of course, this was a referendum that never actually happened. Instead, and after pressure was applied during the G20 meeting at Cannes, Papandreou quickly backed down:

Speaking after the G-20 meeting in Cannes, US President Barack Obama questioned Prime Minister George Papandreou’s proposal to hold a referendum on the country’s eurozone debt deal and applauded New Democracy leader Antonis Samaras for backing last week’s Brussels agreement.

“We came to Cannes to discuss with our European friends how they will move forward and build upon the plan they agreed to last week to resolve this crisis,” he said.

Obama said the “actions of Papandreou and the referendum issue got a lot of people nervous.” He added that the plan European leaders presented last week is “still the best recipe.” He commended Samaras for saying he would support the bailout after the referendum proposal was dropped.

Dutch Prime Minister Mark Rutte welcomed Papandreou’s decision to withdraw the referendum but warned that the eurozone might lose patience with Athens. “It was a bizarre proposal,” Rutte said. “We think it’s of great importance to the eurozone that we prevent Greece from going bankrupt. But in the end, the euro is more important than Greece’s membership of the eurozone.” 9

It was an episode that led to Papandreou’s resignation and the appointment of former Governor of the Bank of Greece and Vice President of the ECB, Lucas Papademos, as interim Prime Minister. Following which, the “austerity” went on, the “debt crisis” deepened, and still the Greeks were yet to have a real say in what was happening to their country.

Almost four years and multiple general strikes later and the new Syriza-led government finally gave the people of Greece the referendum previously denied them. Although the detailed choice was a complex one, it boiled down to more or less straightforward ‘yes’ or ‘no’ – and not ‘yes’ or ‘no’ to staying within the Eurozone as so many have disingenuously claimed, but a ‘yes’ or ‘no’ to the latest bailout deal and further “austerity”:

In fact, only the “No” can save Greece – and by saving Greece, save Europe. A “No” means that the Greek people will not bend, that their government will not fall, and that the creditors need, finally, to come to terms with the failures of European policy so far. Negotiations can then resume – or more correctly, proper negotiations can then start. This is vital, if Europe is to be saved. If there ever was a moment when the United States should speak for decency and democratic values – as well as our national interest – it is right now. 10

So wrote economist James K. Galbraith prior to last weekend’s momentous referendum. And what he says is correct. The Greeks have indeed voted to stay in Europe and the Eurozone, having never offered Syriza any mandate to leave. As it transpires, they may now be forced out, or at the very least, forced into another general election. Syriza may then be obliged to stand on a ‘we will leave the euro ticket’, which, and as popular as Syriza are, would mean an election that they would currently be unlikely to win.

But then, as my friend in Germany points out, leaving aside the Greek concessions for a moment, this weekend’s deal pivots upon massive debt restructuring/cancellation, which is why Syriza have felt compelled to offer Germany the chance to wrestle some kind of victory, whilst returning to Greece as winners too. If a deal can be struck, then certainly hardliners on both sides will come away disappointed, and this is one reason any deal may very likely fall through.

Discretion is sometimes the better part of valour, and there are many occasions when it is necessary to take a step or two backwards in order to regain your balance again. Perhaps the very best Syriza can achieve right now, given the intransigence and bullying of the anti-deal voices within the Eurogroup, is to play for time. Right now, the banks in Greece desperately need to reopen in order to restore normality. For ordinary life must go on. Meanwhile, agreeing terms on privatisation and so forth is one thing, whereas implementing such deals is another thing altogether, because as my friend in Germany reminded me “… it’s Greece after all.”

Q: At the onset of the crisis, the former Finance Minister Papaconstantinou likened the Greek economy to the “Titanic” heading straight for the iceberg. Do you also feel as if you are standing on the bridge of the “Titanic”?

A: No. The “Titanic” sank a while ago. We’re steering the lifeboat and throwing lifebelts to those drowning around us.

This was the response Greek Prime Minister, Alexis Tsipras, gave in an exclusive interview to German magazine Stern. 1

*

“austerity”, what is it good for…?

As the economies of the western world continue to flounder, with Germany too (Europe’s last remaining industrial powerhouse) reeling just a little from the greater crisis, debt reduction is still regarded as the key component to any recovery programme. To meet these ends, all our governments have been overseeing huge cuts in public services, welfare payments especially gouged, in concerted efforts to reduce their deficits. This death of our societies by a thousand cuts of “austerity” being the recommended cure which mainstream economists have called for, and though alternative voices have no less insistently pointed out that “austerity measures” are inherently counterproductive (since they reduce tax revenues), these dissenting voices continue to be marginalised.

A few years ago Thomas Herndon stepped forward. Herndon, a university student and thus less rigid in his outlook, caused quite a rumpus – as a consequence, he has since been rewarded with his own wikipedia entry. This sudden burst of fame coming after he inadvertently stumbled upon grievous errors in an influential paper entitled Growth in a Time of Debt (published 2010), authored by eminent Harvard professors, Carmen Reinhart and Ken Rogoff – Rogoff, a former chief economist at the IMF.

In their paper, Reinhart and Rogoff had purported to show that whenever national debt is in excess of 90% of GDP, growth is “roughly cut in half”. This correlation had subsequently been quoted by policy-makers across the world, as well as routinely served up as empirical proof that there was simply no viable alternative to our continuing “austerity” programmes. Most notably, perhaps, former EU Commissioner for Economic and Monetary Affairs, Olli Rehn, leant rather heavily on Reinhart and Rogoff’s work.

But then doubting Thomas Herndon decided to check their figures for himself. And, to his own astonishment, discovered that one of the most frequently cited justifications for the imposed “austerity” strategy actually rested upon a few careless mistakes on a spreadsheet!

[Herndon had] spotted a basic error in the spreadsheet. The Harvard professors had accidentally only included 15 of the 20 countries under analysis in their key calculation (of average GDP growth in countries with high public debt).

Australia, Austria, Belgium, Canada and Denmark were missing.

Oops.

Herndon and his professors found other issues with Growth in a Time of Debt, which had an even bigger impact on the famous result. The first was the fact that for some countries, some data was missing altogether. 2

Taken aback by this unexpected challenge from a novice, Reinhart and Rogoff felt obliged to issue a response:

We are grateful to Herndon et al. for the careful attention to our original Growth in a Time of Debt AER paper and for pointing out an important correction to Figure 2 of that paper. It is sobering that such an error slipped into one of our papers despite our best efforts to be consistently careful. We will redouble our efforts to avoid such errors in the future.

Confessing to their blunder, but keen also to defend their professional reputation, they casually added:

We do not, however, believe this regrettable slip affects in any significant way the central message of the paper or that in our subsequent work.

There has since been no halt to the economic gouging and scourging of Europe. Despite the more immediate evidence coming out of Greece, Spain, Portugal, and every other place where such “measures” have been most strongly administered, that prove “austerity” isn’t working. And even when all other factors, social and human factors, are set aside, and success or failure is judged within the exceedingly narrow terms of its proponents, we see that the sovereign debt burdens in all these countries have continued to rise. 3

Given such a lack of success, the response is obviously to double-down. Apply more stringent “austerity”; if the original cuts have failed, then they needed to be deeper. In former times the doctors would just have ordered more leeches, or the priests would have demanded a tightening of the cilice. Tougher love. Just too bad if the supposed antidote is the worst of the poison, because orthodoxy asserts that, poison or not, it is the best and only remedy. The really important thing is to never let mere facts (especially incalculable costs like human misery) get in the way of a damned fine economic theory!

*

whose debt is it anyway…?

But how did these sovereign debt burdens arise in the first place? Or put another way, the related question might be asked, to whom are the debts actually owed? This second question is rarely broached, but in 2013 award-winning business journalist, Harald Schumann, sought a direct answer to precisely this question. He journeyed across the stricken eurozone countries and poised the question to those working inside the so-called “Troika” (IMF, European Central Bank and EU Commission) as well as significant politicians, economists, lawyers, journalists and even the occasional central banker. The result, a brilliantly constructed documentary entitled The Secret Bank Bailout, is embedded below:

I highly recommend watching the documentary in full, but would also like to offer a brief overview.

Schumann asks which parties were actually rescued by the bailouts, and finds that contrary to what ordinary Germans were led to believe (this is a German documentary originally titled Staatsgeheimnis Bankenrettung) the people living in the poorer eurozone states received barely a penny of this apparent ‘foreign aid’ – our own media perpetuates the self-same falsehood. Because rather than letting the creditors and the banks absorb their speculative losses, these financial institutions were deemed “too big too fail” and protected. So the bailouts were never used to support the governments, but always passed on to the creditors of major banks, especially ones in Germany and France, who had taken the unwise risks that caused the crisis – the original losses often due to property bubbles in places like Spain and Ireland. (The whole notion of “too big too fail” is, of course, a contravention of even the most basic tenets of free market capitalism.)

And who have been the ultimate recipients of all this bailout money? Well, that has remained a closely guarded secret. We ought to be asking why, of course, which Schumann’s documentary does. He also seeks to penetrate the secret itself.

In the next sections, I will present a further overview comprising highlights of Schumann’s discoveries, and following the same route (then a little beyond it) as he investigated country by country, across the blighted eurozone.

*

Ireland

The Irish people have been forced to take on 70 billion euros of additional debt to pay off foreign creditors.

Stephen Donnelly, independent Irish MP, says that the ECB held the Irish government virtually at gunpoint:

“The suspicion is that European Central Bank said ‘You will continue to pay these bondholders [the mainly foreign creditors] to whom you owe nothing or we will pull the emergency funding out of your banking system, thereby collapsing your banking system, thereby collapsing your economy.’ To me that is gunboat diplomacy… [with a little prompting] or blackmail. It is a very, very serious threat for a central bank to have made in actually forcing a sovereign nation to surrender its sovereignty to bailout an independent group of investors. Was the ECB acting illegally?”

Brian Hayes, Irish Deputy Minister of Finance:

“Of course that was a position that was foisted on the Irish people as a result of the decisions taken… It was the majority view of the ECB that this money had to be paid back.”

And where did the Irish bailout money go? A full breakdown of the bondholders of Anglo Irish bank is available here. (The list was publicly released by blogger Guido Fawkes.)

Germany has the most with 15 of the bond holders. Who between them hold 5.3 trillion euros.

France is next with 10 bond holders. Who have an estimated 4 trillion.

The bondholders include some of the world’s largest banks: Deutsche, Soc Gen, Barclay’s, PNB Paribas, UniCredit (who don’t appear on the list but own Pioneer Investments) and Wells Fargo (also not on the list but who own European Credit Management). There is also Goldman Sachs and Rothschild Group. 4

As Harald Schumann says “It’s like a Who’s Who of the financial world.”

Back to Stephen Donnelly:

“No country on earth in history has ever paid that amount of money back without having its own monetary policies… you gradually bleed, year on year on year. And now you really do depend on Europe. There was a quote by Nelson Mandela where he said something like: ‘It is the greatest tragedy of the human condition that we must endure so much pain before arriving at a compromise that we always knew was going to be needed.’”

The first lesson, therefore, is that the solution – any practicable solution – has to include debt cancellation.

*

Spain

The Spanish people have been forced to take on 40 billion euros of additional debt to pay off foreign creditors.

Harald Schumann confronted Luis De Guindos, Spanish Minister of Finance, with advice he was given Stephen Donnelly that they would be better to let (some of) the banks fail because “banks have to be allowed to fail”. But Luis De Guindos disagrees:

“I think that the Irish situation is totally different from the Spanish situation. As I have said before, the size of the balance-sheet of the Irish banks in comparative terms with the GDP of Ireland was three times larger than the case of Spain. So I think that while in the case of Ireland the cost of recapitalising the banks has been above 20% of the Irish GDP, in the case of Spain we are talking 4% of GDP. So it’s a totally different situation and it’s not comparable at all.”

But economist Juan Rallo disagrees with De Guindos, and beginning with the figures themselves: “The real figure is not 40 billion, but 80 or 90 billion…”

And who are the creditors of the Spanish banks (particularly Bankia)? When Schumann manages to get hold of a list (thanks to “friendly people that help me”) he discovers that Deutsche Bank again features prominently.

Juan Moreno is a lawyer working with the 15M protest movement, who filed the lawsuit for the closure of Bankia to save the Spanish taxpayers from a bailout. When asked if the system would have collapsed, Moreno says:

“If you were to drop Bankia it would probably lead to the collapse of other banks, but not the big banks like BBVA, Santander, La Caixa, [Banco] Sabadell, or [Banco] Popular.”

Back to Luis De Guindos:

“A money market economy with fiat money is unstable. And we have an example that we let the banks go down… it was the Great Depression. It was the worst depression we had over the last century.”

Juan Moreno’s response:

“It’s all scaremongering. I don’t want that, I want numbers. I want to know what would really happen if they were to go bankrupt… With what we know now we would say this bank is beyond saving. We can’t continue to pour billions of euros into it. The creditors must take losses…

“The trial uncovered that the bank figures were falsified by upper management, but now we discover that the same had happened at the lower management levels. So a banking culture developed where employees were rewarded with bonuses so that the upper level did not realise how bad things were at the local branch level… The judge said that there was indeed public control of the bank, but the government supervisors played along. Letting the fox guard the hens is good for nothing.

“They’re all criminals: those in charge of Bankia and the public supervisors. If they’d let the savings banks go bankrupt, we would have found out what the politicians did with the money. Much of the debt that cannot be repaid is money that went to political parties, to city administrations, for work in the autonomous southern regions to companies connected to the government. These revelations would have made the political class disappear.”

So what is Moreno’s advice to the Germany citizens who are paying to prop up this corrupt system…?

“Numbers. The balance-sheet. It’s simple. You have to know the facts and apply the laws.”

*

Cyprus

Meanwhile, depositors in Cypriot banks (savers as opposed to taxpayers) had more than 6 billion euros seized overnight in a so-called bail-in to pay off foreign creditors. This has crippled many businesses and stifled economic growth in a different way.

Panicos Demetraides, Governor of the Central Bank of Cyprus:

“It’s a change from past bailouts that we have had to bail-in on this occasion [from] uninsured depositors in the two big Cypriot banks. The burden of this bail-in has been borne partly by non-residents, but also partly by residents, Cypriot companies and households. About two-thirds of the burden has been borne actually by non-residents and one-third by residents.”

But as German MP Gerhard Schick (Green Party) explains:

“The European Central Bank allowed the Cypriot Central Bank to give money to banks in Cyprus even though they were insolvent. That’s a real mistake because then non-functioning structures are upheld and taxpayers’ money – and that’s what we’re talking about with a central bank – is endangered. In this way the ECB slowed down the rescue programme and made it possible for many creditors to withdraw their money and invest it elsewhere… The ECB was a creditor acting in self-interest to protect its own money. This conflict of interest should never have been allowed to happen, but it did because central bank money was put into bad banks.”

Back to Panicos Demetraides:

“Certainly the delays offered more informed investors [the chance] to protect their own investments. And they put the less informed investors at a disadvantage.”

Does this mean the ECB allowed other European banks time to withdraw their money? That must be some sort of rumour, says Demetraides. It is a rumour that must persist until there is an independent investigation, but as Gerhard Schick points out:

“The problem is that the ECB is a closed shop, and neither the European Parliament nor national parliaments are really able to call it to account when it breaks the rules.”

Harris Georgiades, Cypriot Minister of Finance:

“For us it was a take it or leave it situation. A decision that we accepted under pressure, and with no time to negotiate extensively. Essentially both of our kneecaps have been broken, and now we are asked to run.”

*

Greece

Greece entered the crisis with a debt-to-GDP ratio of 110% and with around 10% unemployment. It was then put through an “austerity programme” supposedly designed to tackle the debt. Five years and several thousand suicides later, unemployment currently stands at 30% and debt-to-GDP is at around 180%.

This tremendous spike in debt remains in spite of ‘haircuts’ known as the Greek “Private sector involvement” or PSI, the first announced in July 2011, and quickly followed by PSI Mk2 (after PSI Mk1 failed), which involved a impressive sounding 50% reduction in the face value of Greek government bonds (GGB).5 But then, as Yanis Varoufakis, current Greek Finance Minister, but as then a lowly Professor of Economics, wrote soon after:

In short, and so as not to overlabour the point, PSI Mk2 is dead in the water. The shenanigans of the shadow banking sector (which, lest we forget, includes not only the hedge funds but also, remarkably, the ‘proper’ banks shady Special Vehicles) plus the predictable deterioration of the Greek economy have put paid to it. The negotiations may go on for a little while longer, the announcement of a brilliant agreement may be made but, in truth, the idea that the Greek haircut will put Greece’s debt-to-GDP ratio back on a course towards 120% has sunk without trace. And if you need hard evidence for this, the European Summit of 9th December provided it even before 2011 was seen off: Officially, Europe’s great and good announced the end of PSI as a policy of the new ESM; Europe’s future central, permanent bailout fund. It had all been a mistake, they seemed to confess. 6

Greece has never been bailed out, only the European banks (well over 90% of the bailout money returning to them), and likewise the ‘haircut’ actually caused more problems than it solved. In particular, it permitted the looting of social security and public pension funds that are mandated by law to invest in government bonds – the following is taken from a special report published by Reuters:

Greece’s pension funds – patchily run in the first place, say unionists and some politicians – have been savaged by austerity and the terms of the international bailout keeping the country afloat.

Workers and pensioners suffered losses of about 10 billion euros ($13 billion) just in the debt restructuring of March 2012, when the value of some Greek bonds was cut in half. That sum is equal to 4.6 percent of the country’s GDP in 2011.

Many savers blame the debacle on the Bank of Greece, the country’s central bank, which administers three-quarters of pension funds’ surplus cash. Pensioners and politicians accuse it of failing to foresee trouble looming, or even of investing pension fund money in government bonds that it knew to be at high risk of a ‘haircut’ – having their value reduced. 7

In June 2014, Yanis Varoufakis was interviewed by Harald Schumann. Excerpts would feature in another collaboration between Arpad Bondy and Schumann; their follow-up documentary The Trail Of The Troika (in German, Macht ohne Kontrolle – Die Troika), which plotted another route across the continent in order to show how “austerity measures” have utterly failed to rescue the eurozone economies, and how in the process “the Troika” has also flagrantly breached its own European treaty regulations. Unfortunately, an English version of this more recent documentary is at present unavailable on youtube or elsewhere (so far as I can ascertain – but I will certainly embed a version as and when I find one). Meanwhile, uploads of the various interviews filmed during its making are now freely available, and embedded below is Schumann’s unabridged interview with Varoufakis, of which I have again selectively transcribed some of the answers he gave last summer:

What was the bailout for? The bailout was not in order to bail Greece out. Greece was never bailed out. The bailout loan that was extended in May of 2010 had a very singular, simple purpose. It was to transfer banking losses from the asset books of banks, not only Greek ones, but also French ones and German ones, onto the shoulders of the taxpayers. Initially the Greek taxpayers – because they knew that these shoulders were too weak to bear those losses, eventually it was always part of the plan to transfer them onto the shoulders of the German, and the French, and the Dutch and the Finnish taxpayers. And “the Troika” is here supervising this sinister transfer. [5:45 mins]

Smart people in Brussels, especially in Frankfurt, and of course Berlin, knew in May 2010 that Greece would never be able to repay its debts. They knew that again in the Spring of 2012 when they extended the second loan. They know it again now. In their minds they have already written off a very large bulk of the billions and billions that was given to the Greek state to give to the Greek banks and to give to the rest of the banks. All other things being equal, of course, “the Troika” would much rather more money was repaid than less money. But all other things are not equal. At this very moment in time, as we speak, while the Greek banks have huge black holes that we all know, even though they are not being admitted to, something similar is happening in the rest of the eurozone. Deutsche Bank, Finanzbank, BNP Paribas are skating on thin ice. They will never admit to it. And part of the angst and of the anxiety of the powers in Brussels, in Frankfurt, in Berlin, is how not to admit to the German, to the French, to the Dutch, to the Finnish people, that their banking sector was never really put back on an even keel. 8 [7:15 mins]

In 2010, what they had done was this: they lied to the Greek people and to the German people. They said to the Greek people: We have avoided bankruptcy. And they said to the German people that the Greeks, they were waivered, now we are going to punish them with austerity. But we will lend them the money because European solidarity demands that. In reality, what they were doing was transferring banking losses from the bankers – the European bankers, all of them – onto the shoulders first of the Greek taxpayers and eventually onto the German taxpayers, because the Greek taxpayers could not shoulder all of this money.

So they had lied to the German taxpayers. They said: We are not going to haircut the Greek debt. They were always going to haircut the Greek debt. They knew it. What they did with first bailout loan was to shift that big bulk, a 110 billion, from the bankers’ loss book onto the shoulders of Europe’s taxpayers. And then, after that had been effected, of course then they had to haircut – to do what they said they were never going to do – and who did they haircut? They haircut the small bondholders and the pension funds… So the PSI, the second bailout, the haircut of the private sector, was part of the original process of shifting the burden of adjustment and the cost of the crisis from the shoulders of those who caused it, onto the shoulders of those who didn’t cause it in Greece and in Germany. And all that in the name of European solidarity. And then they wonder why right-wing parties of the extreme part of the spectrum are winning power – or, at least, winning seats in the European Parliament. [21:30 mins]

Asked whether he thought the 2008 crisis had been caused as a result of incompetence or due to a more deliberate act of conspiracy, Varoufakis replied:

It wasn’t a conspiracy. It was a very simple operation: How do we stay in power? Mr [Jean-Claude] Juncker said it. Once he admitted: we know what needs to be done, we just don’t know how to do it and remain in power. Now don’t forget that before 2008, 2010, all parties of government, whether they were Christian-Democratic, Social-Democratic, it doesn’t matter. They had developed this extremely close relationship with the financial sector. They had looked at the financial sector as the cow that would bear the milk from which they would feed all, not only their political parties and careers, but also the welfare state – from the point of view of the Social-Democrats.

There was a kind of Faustian bargain between our politicians and bankers. We will let you do what you want, and you pay us a small amount proportional in order to fund our states. So when the crisis hit – which was completely unexpected for them – they had neither the analytical power nor the moral authority to go to these bankers and say: You know what, you’re out. You’re bankrupt, we’re taking over the banks… 9 [24 mins]

Finally, here was what Yanis Varoufakis, the economist (and not yet Finance Minister) said when asked for “any realistic proposal [to] how the dire economic situation in Greece can be improved”:

Well, we have to stop doing what we are doing and do something quite diferent. And there are two levels at which you should see this, because let’s not forget that once we have a monetary union you can’t talk about the overcoming of the crisis in one part of it in isolation to the others. It would be like talking about how South Dakota would escape the Great Depression in 1933 without the rest of the United States going through the New Deal. So we need a New Deal for Europe… 10 [32:30 min]

But, I have to insist: The solution must be European, because the crisis is European. And there are things we can do within two weeks to end this euro-crisis without violating any of the European Union treaties as long as we have the political will to do it. 11 [34:30 min]

*

there is a better alternative… (and always was)

Q: Your Finance Minister Varoufakis said that he is not afraid of an Armageddon.

A: He said in parliament: if you enter into negotiations, you are not seeking a breakup. But you have to keep a breakup in mind as a contingency. I share this view.

Q: So you have a Plan B in case Greece does decide to exit from the single currency?

A: We don’t need a contingency plan because we will stay in the eurozone. But we won’t achieve this objective at the expense of the weak – like our previous government.

On April 16th, Varoufakis was invited to speak at a press conference hosted by the Brookings Institute which is based in Washington. In answer to a question about being trapped in a position where the Greeks are left with little alternative but to default, Varoufakis replied:

I would willingly, eagerly and enthusiastically accept any terms offered to us if they made sense. I would have no problem with the Memorandum of Understanding if it was founded upon a reform programme that attacked the worse cases of rent-seeking in Greece, and made the reforms that were necessary in order to enhance efficiency and social justice. If it came for the planet Mars, if it came from Berlin, if it came from Brussels, if it came from Portugal, from Slovakia, I don’t care which, I would have embraced it. The problem we have with these conditions – you know, the take it or leave it conditions – is not so much the authoritarianism, it is that fact that we’ve tried that medicine and it hasn’t worked…

It is almost precisely three years ago since I wrote a post entitled ‘austerity’ or ‘Grexit’: is there really no better alternative for Greece? There have since been more than two and a half years of unrestrained “austerity” (prior to Syriza’s victory), a “take it or leave it” Hobson’s choice, which has deepened the crisis not only in Greece but across the entire eurozone. ‘Grexit’ has never been a realistic alternative, and as Syriza have maintained from the outset, they have no intention whatsoever of ditching the euro. So ‘Grexit’ becomes ‘Grexident’, in other words, an impossibility. Because any accidental Greek exit can only occur if it is accidentally on purpose, and that would mean ‘Grexpulsion’ – a term the mainstream has yet to adopt for obvious reasons.

In Washington, Varoufakis was once again unequivocal about Syriza’s position:

“Toying with ‘Grexit’, which is something we don’t do – we are refusing to discuss it, because as I have said before even worrying about it is like worrying about being hit by a comet in a universe in which comets are attracted to you if you are worried about them – toying with ‘Grexit’ and ideas of amputating Greece is profoundly anti-European because anybody who claims that they know what the effect of a ‘Grexit’ is, are deluded.” [52 mins]

*

Which brings us to an impasse. Accept “austerity” or get out! Jump off a cliff or suffer slow death by a thousand cuts. Is there really no genuine alternative for the Greeks?

Well, the answer to that question actually depends upon what you value. If you think that all debts are sacrosanct, then it necessarily follows that the Greeks must go on paying the banks to their bitter end. That the debt is unpayable doesn’t matter. That the debt is the consequence of so much ineptitude and malfeasance within the banking system doesn’t matter either. The Greeks must cough up because otherwise the chaos will worsen (or so we are again constantly given to believe). But if you value human life above money, and recognise that debts that cannot be repaid will never be repaid, then you can begin to think more constructively. In fact, the alternative becomes immediately and blindingly apparent. Since a debt cancellation will inevitably come sooner or later, the only real question is how much longer must the Greeks be punished in the meantime.

A way-out of all this mess is entirely possible. It doesn’t involve “austerity” and does not necessarily require a Greek exit from the eurozone. What is needed is simply an end to the bottomless banker bailouts and then new money being made available for reconstruction projects and other productive enterprise within Greece, Spain and elsewhere. Such a ‘New Deal’ injection is unlikely to be offered by the IMF, and neither will it be supported by the likes of Angela Merkel. But it can be fought for by the Greek people themselves, and in this battle to stop the wanton destruction of their nation, as fellow Europeans we should stand with them, recognising that the same aggressive financial interests that have already eviscerated Greece, will be pillaging our own lands soon enough.

The paragraphs above are taken from the post I wrote three years ago – yet so little has significantly altered that it remains pertinent enough to repeat it.

Back to Varoufakis who puts flesh on those barest of bones regarding the ‘New Deal’ option for Europe (and presenting the way ahead without any recourse to deficit spending by governments – so heretical to the neo-liberals):

Europe as a whole, the eurozone as a whole, is typified not only by a mountain of great private and public debts, which we do have. But there is another mountain hiding behind it: a huge mountain of idle savings with nowhere to go. And it should be our joint project to energise, to motivate, those idle savings, to help them overcome their great fear that keeps them idle, and channel them into productive investments – not investments into assets, but investments into real productive capacity. Now, how do we do this? Well, we have the European Investment Bank [EIB] that could do this. And we have the European Central Bank which is embarking on quantitative easing. Well, why can’t the EIB fund a major ‘New Deal’ for Europe, that channels investment to the private sectors of the countries and regions within countries that have a major output gap? [44 mins]

The whole of Varoufakis speech at the Brookings Institute and the subsequent Q+A session is embedded below:

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last frenzy of reasonableness…?

Just days after Syriza were swept to election victory on January 26th, economist and former US Assistant Secretary of the Treasury for Economic Policy under Reagan, Paul Craig Roberts, published an article entitled “Is Democracy Dead In The West?” which began:

We will find out the answer to the question posed in the title in the outcome of the contest between the new Greek government, formed by the political party Syriza, and the ECB and the private banks, with whose interests the EU and Washington align against Greece.

Roberts, once known as the “Father of Reaganomics” but more recently a repentant neo-liberalist and outspoken opponent of the financial elites, continues:

The new [Syriza] government wants to moderate the agreements made by previous Greek governments that sold out the Greek people. The new government wants to stop giving away at bargain prices Greek public assets to clients of its creditors, and the new Greek government wants to raise the Greek minimum wage so that the Greek people have enough bread and water on which to live.

However, for the private bank creditors, for Merkel’s Germany that stands behind the banks, for Washington which could care less about the Greeks, for the Greek elites who see themselves as “part of Europe,” Syriza is something to be rid of.

Adding that:

A purpose of the “Greek financial crisis” is to establish that EU members are not sovereign countries and that banks that lend to these non-sovereign entities are not responsible for any losses with regard to the loans. The population of the indebted countries are the responsible parties. And these populations must accept the reduction of their living standards in order to ensure that the banks do not lose any money.

This is the “New Democracy.” It is a resurrection of the old feudal order. A few super-rich aristocrats and everyone else serfs obliged to support the ruling order. 12

The question is, who is actually right here? Certainly we ought to acknowledge that elements in Paul Craig Roberts’ more conspiratorial outlook are irrefutable, recognising that Goldman Sachs did indeed deliberately help to hide previous government debt in order to extend credit to Greece. The Greeks were set up; this has been established – details of Goldman Sachs involvement can be found in this previous post.

Varoufakis is diplomatic, arguably too diplomatic. But then, is Paul Craig Roberts unduly pessimistic when he says that Syriza can now do “very little”, and, in either case, is the very moderate and rather modest approach of Varoufakis a good one, pragmatically speaking? Extending a hand of friendship being unlikely to impress “the powerful rich interest groups that rule the West [who] could not care less about the people over whom they rule” (to quote Roberts again, who knows them well, of course). Yet it may be effective in another way, such relentless persuasion and his “frenzy of reasonableness” at least winning the more public battle for hearts and minds. My own view is that Varoufakis (and Syriza) have adopted a sensible stance, which is in fact evidenced by the harsh criticism they have received from both extreme flanks. Appearing too flexible has made him a target for derision from the more radical (and Communist) left-wing, whereas standing his ground irritates his more powerful opponents working within the establishment (who lash out publicly whenever Varoufakis is out of earshot).

Meanwhile, ‘Grexident’, German Finance Minister Wolfgang Schäuble’s own portmanteau neologism (I gather), is now trending on twitter – not literally, of course, because it doesn’t have a celebrity angle. But the hashtag certainly exists and the tweets that include it are mostly German and Greek, alternating like a stack of incomprehensible post-it-notes. And sadly, the word ‘Grexident’ isn’t the only eurozone nonsense currently trending:

Academic-turned-finance minister Varoufakis was called “a time-waster, a gambler and an amateur”, a source privy to the closed-door talks told the news service Bloomberg.

This is according to a Guardian article published on Friday [April 24th] and entitled “Time is running out for Greece, says Eurogroup chief”. The article continues:

Jeroen Dijsselbloem, head of the eurogroup of finance ministers, told reporters in Latvia it was a “highly critical” meeting as Greece had still not agreed a comprehensive and detailed list of reforms.

Although there were positive signs, there remained “wide differences to bridge on substance”, he said.

“We are all aware that time is running out … too much time has been lost.” […]

Dijsselbloem warned on Friday that after the lack of recent progress it would be very hard to consider a new programme for Greece to cover its funding needs beyond June. He ruled out giving Greece an early slice [of] bailout cash. […]

ECB president Mario Draghi also betrayed his exasperation and warned that central bank could impose tougher conditions in return for keeping Greek banks afloat.

Weeks ago, the Riga meeting had been pencilled in as the moment when the eurozone could sign off an aid payment for Greece, but in the event ministers vented their frustration with Varoufakis for Greece’s failure to bridge the gap with creditors.

Just to remind you, Mario Draghi is not only the former vice chairman of Goldman Sachs – directly implicated in bringing the crisis to Greece – but serves as a trustee of the Brookings Institute. 13

So watching Varoufakis descend into the belly of the beast that is the Brookings Institute and to receive such a warm welcome and nonjudgmental reception, I must confess that I was instantly reminded of the film, Goodfellas, Martin Scorsese’s gangster classic, and of one scene in particular:

“If you’re part of a crew, nobody ever tells you that they’re going to kill you. It doesn’t happen that way. There weren’t any arguments or curses like in the movies. So your murderers come with smiles. They come as your friends, the people who have cared for you all of your life, and they always seem to come at a time when you’re at your weakest and most in need of their help.”

But Varoufakis is not easily daunted, and so, as the Guardian piece describes:

Varoufakis said the talks [in Latvia] were “intense”, but remained confident that the two sides will resolve their differences in time.

“We agreed that an agreement will be difficult but it will happen and it will happen quickly because that is the only option we have,” he told a press conference.

Varoufakis later declared: “We want an agreement and we are willing to make compromises to achieve this … The cost of not having a solution would be huge for all of us, Greece and the eurozone”. 14

In saying so, he is quite correct. Not only the Greeks, but the Germans too, whose major banks are set to carry the heaviest losses in the event of default, ought to be aware of the extreme dangers of such brinksmanship. A basic instinct for self-preservation is what Varoufakis is relying on, but for so long as the banks and other financial institutions remain confident of receiving further bailouts, it is the German taxpayers who ought to worry – as should the rest of us – because so long as they remain “too big too fail” (i.e., untouchable) then bankers like Mario Draghi and co really have nothing at stake. For once the Greeks are unable to shoulder the debt burden, as Varoufakis reminded us last summer, it will be passed on to the shoulders of the Germans and the French.

Indeed, the people of Europe stand to lose enormously if this so-called ‘Grexident’ (in reality ‘Grexpulsion’) leads to ‘Grexit’ and then to ‘Grextagion’ as it will be doubtless be called; as idiotically named as it will have been idiotically contracted and spread. Because, if no compromise can be reached in spite of Varoufakis’ tireless efforts, then sooner then we imagine we may all be standing in the Greek people’s shoes.

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Update:

A weekend can be a very long time in politics…

Unbeknownst to me, on Sunday 26th [the day before I posted this article] Yanis Varoufakis had put out a tweet in which he quoted the words of Franklin D Roosevelt, who famously said “They are unanimous in their hate for me; and I welcome their hatred”, adding simply “A quotation close to my heart (& reality) these days”:

FDR, 1936: "They are unanimous in their hate for me; and I welcome their hatred." A quotation close to my heart (& reality) these days

This would be one of his final acts as chief negotiator at the Eurogroup meetings:

Greece moved to inject fresh momentum into problem-plagued talks with creditors on Monday, reshuffling its negotiating team to try and defuse tensions over its outspoken finance minister. […]

In a bid to ease tensions with lenders, the Syriza party-led coalition said the minister of international financial relations, Euclid Tsakalotos, would take over the coordination of the new team. The appointment will see the economics professor, who was raised in the UK, assuming a more active role in face-to-face negotiations with creditors.

So writes Helena Smith in the Guardian [April 27th], her reportreleased a mere two hours after I posted.

Varoufakis told us that before he took the job he had written a pre-prepared resignation letter to carry around with him at all times, just in case he ever found himself sounding too much like a politician. Hopefully this will not be needed, and news that he has been “removed” is perhaps a little exaggerated:

[However,] one well-placed Athens official insisted that Varoufakis’s role had been upgraded “in many ways”. The official added: “To make him resign would be to retreat and the government would never do that.”

Three months after his elevation to power, prime minister Alexis Tsipras has come under extraordinary pressure to remove Varoufakis. Yet last night Tsipras said that his finance minister “is an important asset for the government, and [with creditors] he speaks their language better then they do”. In a wide-ranging interview aired on Greek TV, Tsipras rejected suggestions that his government had any intention of sacrificing the politician. Now that negotiations with creditors were in the final straight, Greece had to reorganise its negotiating team, the PM said. […]

But insiders insisted that the politician still enjoyed Tsipras’ confidence, even if the young premier was now reaching out to the German chancellor Angela Merkel in an effort to reach a political solution.

With his high popularity ratings at home, Varoufakis is credited with internationalising the country’s debt problem and raising questions over austerity economics.

“They [creditors] couldn’t counter his economic arguments rationally so they went for him claiming he didn’t understand eurozone rules and regulations, that his reforms weren’t good enough,” said one official. “Tsipras knows this is not about Varoufakis, but his government, because it has dared to take on the system that is Europe’s neoliberal doctrine. He knows that if one goes the other goes too, which is why Varoufakis is here to stay.”

I very much encourage Tsipras to stick by Varoufakis, certainly in the capacity of his chief economic advisor, if not within government itself. We so very seldom see anyone of such intelligence, integrity and courage in public office. The world needs more politicians like Varoufakis, not less.

Please note that I corrected this update after mistakenly believing that Varoufakis had stepped down from his role as Greek Finance Minister. Apologies for posting the incorrect original version.

3 Here are some interesting graphs taken from an wikipedia article entitled “European sovereign-debt crisis”, which show the rise in the levels of Greek, Spanish and Portuguese debt since 1999 as compared to the average of the eurozone:

All three graphs (and others including those for Ireland and Cyprus) show a marked turning point around 2007–8, providing further evidence not only that “austerity” hasn’t worked (even within its own terms of debt reduction), but that the western world is actually faced with a systemic banking crisis that flared up at that time. The debt-to-GDP ratios have flattened towards the end, but even so the downturn is mostly in the projected regions.

And this is from an article written by Tyler Durden and posted on zerohedge from February 18, 2013:

“Beleaguered Prime Minister Mariano Rajoy just broke another record. As if a plague of corruption scandals was not enough, Spain’s debt-to-GDP has now reached levels not seen in over 100 years. As El Pais reports, Spanish debt levels rose at an alarming EUR 400 million per day in 2012 making for the largest annual increase in debt in the nation’s history – all the while proclaiming austerity.”

And here’s another helpful graph that goes along with the article, showing once more that rather than reducing the nation’s debt, “austerity measures” are more closely correlated to the growth of that debt:

5 Based on figures taken from an article entitled “Greece’s PSI is Dead on Arrival: An error in search of a rationale but also a failure that may prove a harbinger for the Modest Proposal” written by Yanis Varoufakis, published on January 11. 2012:

Back to the drawing board, our European leaders came up with a deeper haircut in October 2011. They called it PSI Mk2 and even had the foolish Greek PM fall on his sword, to be replaced by a hitherto loyal ECB functionary, so as to ensure that PSI Mk 2 would become Greece’s new light on the hill; a beacon of the last glimmer of hope for a desperate nation. PSI Mk 2 envisaged an impressive sounding 50% reduction in the GGBs’ face value which, in present value terms, would result in a haircut no less than 60% (since the interest rates charged on the new bonds, that would be swapped with the old ones, could not exceed the interest rates charged by the ECB and the EU for the original bailout funds). In other words, holders of GGBs would be hair-cut in two ways: a 50% reduction in face value and an interest rate less than 5% which would cut further into the present value of the old GGBs.

“The one thing if I were, I am not, but if I were the CEO of Deutsche Bank, I would be very wary of the dangers from “the Troika” in Athens that is casting a critical gaze into what is happening to Greek banks. Because if “the Troika” takes a keen interest, it will have to declare that the Greek banks are beyond salvation. And the only possible outcome of that would be nationalisation of these banks.”

“There is no doubt that there was a great deal of incompetence. Our leaders, and I have to say most of my profession – speaking as an economist – had become steadily lobotomised since the late 1970s. We didn’t have leaders who understood macroeconomics… You just let the markets perform their triumphant trick and everything will be fine. Politicians were convinced of that, their careers went swimmingly, their cosy relation with the financial sector was working out for them beautifully. When the whole thing, this bubble, collapsed, they were found wanting analytically – they didn’t understand what happened – they believed their own rhetoric and when they started realising the truth, at that point they had already misled parliaments and electorates to such an extent that they would much rather die than confess to the sins of omission and commission.” [25:45 min]

Regarding the Greek situation, the Greek debt, for instance. What we need to do is, we need, since the German government is going to find it politically very difficult to go to the parliament in Berlin and say: Well, it was all a mistake, we have to write off their debt. What you can do is you can create euphemisms – you can create what Keynes referred to as bisque bonds, GDP-related bonds. The Greek government could issue particular bonds that it exchanges for the debt that the ESF [European Social Fund] holds. And those bonds could specify that they can last 30 years let’s say. In 30 years they become extinct whether they have been repaid or not. And that the coupons, the repayments, on a year to year basis depend on the level of growth in Greece. So if growth is more than 3% then it specifies particular payment. That way Mr Schäuble will be able to look at his parliamentarians and say: We haven’t haircut it, but the extent to which the Greek debts will be repaid will be linked to our success in helping Greek growth. So you make them partners in Greek growth as opposed to bailiffs who come in and take your furniture away and throw you out on the street. [33:15 min]

Three things: The first thing we need to do is deal with the banking sector troubles throughout the eurozone. And the way I would do it – because we know we have declared this banking union which is really a term confirms there is no banking union – so what we should do about banks is this: Banks that are found out by the ECB in September (when the ECB assumes the role of the single supervisor of the banking system) to be wanting in terms of recapitalisation to have bad assets that have not been declared so far, they should accept money from the ESM – from the European stability mechanism – directly, not through the governments, directly. And the ESM should get shares, the shareholders should be wiped out and the ECB should appoint a new board of directors – hopefully not from within the country in which the bank is domiciled. This way you Europeanise these banks. In 6 months, 12 months, you resell them – you will resell them with a profit because those shares will be purchased by the ESM at very low prices. And then the ESM gets money back, the European taxpayers get their money back, TARP-like. And you do it step by step. You don’t Europeanise all 6,000 banks. The banks that are in trouble…

The second thing you do is to deal directly with the public debt, which is getting worse everywhere – except in Germany because of the low, low interest rates due to the fact that the crisis is proceeding. The European Central Bank should make a simple announcement tomorrow morning that will cost it nothing, zero. And the announcement is this: From now on, every time a government bond matures, the ECB will service, will pay, for the proportion of that bond that corresponds to the country’s Maastricht compliant legal debt. So in the case of Italy it will be half of it. So the European Central Bank will pay for this, not the Italian government. Now I said it won’t cost the European Central Bank anything, so how can that be if it pays half of it? The answer is the ECB issues its own bonds and sells them to the Chinese, to the Russians, to whoever wants to buy them at very, very low interest rates – because the ECB is such a sterling institution – and immediately opens a direct debit account for Italy. And says to Italy: Look, within ten years, this amount of money has to go in there in order to repay the Chinese. So in other words, what I’m suggesting is that the ECB should play a management role for public debt in Europe that costs nothing, that doesn’t require printing a single euro, and does not violate any treaty. Because ths is not a bailout…

And then we have the big problem of growth. Of investment. We have an amazing dearth of investment in Europe, both in the north and in the south. Even in Germany. So what we need is really a Roosevelt-like New Deal – a very large investment programme. I am not talking about a 100 million here and a 100 million there. We need something between 8 and 9% of eurozone GDP to be invested in productive activities… That would be what we need in order to avert deflation and in order to restart growth in Europe. Now we have the European investment Bank in Europe. The European Investment Bank is three times the size of the World Bank. It could very easily effect such a large scale investment-led recovery programme in Europe. The reason why it doesn’t do it, is because the convention is that 50% of every project is funded from a nation state. The nation state is bankrupt. Waive it. And what should we do instead? We should have either the ECB issuing more bonds in order to support the EIB bonds or something simpler than that. Everyone now, including Mr [Mario] Draghi and Mr [Jens] Weidmann [President of German Bundesbank], are speaking about the need for quantitative easing in Europe. Or at least they are considering it. Now we do not want American-style or British-style quantitative easing because this simply inflates bubbles… Mr Draghi’s worried about quantitative easing because he doesn’t know which assets to buy. German assets? Italian, you know, we are going to start arguing like children amongst ourselves, as to whose assets should be purchased. Bu the European Investment Bank issues European bonds, EIB-bonds. Why not have the EIB effect quantitative easing by purchasing EIB-bonds to such an extent that the EIB ca start a New Deal for Europe programme of 8–9% of eurozone GDP with the ECB buying only its bonds, which are European bonds? And also they are triple-A bonds. Now that a combination of those three measures would deal with the banking sector crisis, it would create a rational way of managing the Maastricht compliant and legal part of the debt… and you have a massive investment-led recovery programme.

Mr. Mario Draghi has been the President of Executive Board and President of European Central Bank since November 2011. Mr. Draghi served as Governor of Banca d’Italia SpA since December 29, 2005 until November 01, 2011. He served as Managing Director of The Goldman Sachs Group, Inc. until January 2006. He served as Director-general of Italy’s treasury. He served as an Adviser to the Bank of Italy, an Executive Director of the World Bank and as a member of the Group of Seven deputies. He served as the Chairman of Financial Stability Board. He has been a Director at Bank For International Settlements since June 2012. He serves as a Trustee of The Brookings Institution. He has been Member Of Governing Council of European Central bank since January 16, 2006. He served as a Member of Governing Board at Banca d’Italia SpA and served as its Member of General Councils. He served as Member of Board of Governors – Italy of Asian Development Bank until November 2011. He served as Director of Bank For International Settlements from September 2011 to November 01, 2011. Mr. Draghi has a Doctorate in Economics from the Massachusetts Institute of Technology.

Victory for Syriza means the election of the first anti-austerity party in the western world. Our heartfelt congratulations and best wishes should go to everyone in Greece. The cradle of civilisation and birthplace of democracy have pointed the way forward once again.

Following the financial crisis (which was actually a banking crisis, as I have pointed out many times before), it was Greece that was unfortunate enough to be singled out and placed at the head of the queue for dose after dose of neo-liberal economic shock therapy. The so-called “Troika” of the IMF, ECB and EU being quick to impose a strict austerity programme, backed up with further ‘Washington Consensus’-style ‘conditionalities’ — the enforced privatisation of public services and other types of ‘deregulation’.

More than half a decade later, and instead of prosperity, “austerity” (i.e., savage cuts – I always apply apostrophes) has created a vicious spiral of debt, with mass unemployment and reduced incomes leading inexorably to reduced demand, stifled economic growth and, no less importantly, lost tax revenues that would otherwise have been available for government investment. Along the way, money has been deliberately siphoned from the poorest in society to the wealthiest. But then “austerity” provides a wonderful excuse for this theft and always did.

The main message to be taken from Sunday’s dramatic election result – a landslide victory for one of the newest parties in Europe – was perfectly loud and clear, though certainly not the one that the news media will want you to focus on. It is that ‘austerity’ simply does NOT work! (except for a tiny elite who, some twenty fours prior to the Greek election, were flying home to their mansions from that annual obscenity known as the World Economic Forum in Davos in about seven hundred separate private jets.)

Click here to see a full breakdown of the election results region by region.

Of course, and especially in light of the vapid insincerity of Barack Obama’s 2008 “Hope and Change” campaign, it is understandably difficult for many people to grasp that any kind of meaningful political change can be delivered through the ballot box (or achieved in any other way). Duped over and over again in election after election, we have all been conditioned to believe in our own helplessness. And Obama, more than perhaps anyone else, has been responsible for undermining hope, causing us to feel that to dream of a better future is forlorn and that whatever sociopolitical change comes, invariably turns out for the worst. But we must remind ourselves that Obama was an out-and-out phoney. An insider, Wall Street crony, who was astutely repackaged as a messianic saviour for a naive and race-divided American public. Alexis Tspiras and Syriza are a different kettle of fish altogether. They offer a genuine grassroots opposition which, unlike Obama, came into office despite the efforts of a hostile media, and still remain free from corporate strings. They also bring to the table a set of carefully deliberated economic and other policy demands – something else that was conspicuously absent from Obama’s intentionally vague “Hope and Change” campaign.

Whether or not Alexis Tsipras and Syriza will now deliver on all their promises we must wait and see. Meanwhile, the people of Greece and elsewhere might help if only by continuing to loudly voice support for those same demands. This is a time for everyone of goodwill to put aside lesser ideological differences – just as Syriza have already done by forming a coalition with a party of the right – to join the Greeks in solidarity, supporting their struggle for self-determination and basic democratic control against the oppressive outside forces of “the Troika”.

What the Greek people achieved on Sunday also presents us with a solid foundation for our own fight against “austerity”. They have opened up a window of opportunity (perhaps a narrow one) for establishing a movement that demands real change across the whole continent. For this victory was not about Syriza as such, but about a principle. That lives of ordinary people matter far more than a plethora of inanimate market indices and corporate balance sheets. The greater hope being that a spark from Syriza’s extraordinary election victory will be enough to ignite a chain reaction through Spain (with Podemos), Portugal, Italy and on and on, to ultimately force a total cessation of the callous insanity of the imposed “austerity” regime. And our hopes ought not to end with mere ‘change’ per se, which may of course be good or bad, but for a lasting improvement in our societies, beginning at the economic level, and bringing about a more prosperous future for all nations.

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Here in Britain, the closest group we have to Syriza is Left Unity, who have already formed a loose alliance with both Syriza and Podemos:

Somewhat belatedly (in my opinion), Left Unity recently launched their own election campaign. They are now asking for support:

Austerity has wrecked Britain. We are far worse off now than we were in 2010 – and all we are promised is more hard times. Today the richest 1% in Britain own as much wealth as the poorest half of the population put together.

The 2015 general election will be an opportunity for millions of people across the country to have their say over the austerity programme of the Con-Dem government. The propaganda machine has already sprung into action, with George Osborne claiming to be tackling the national debt and to have the economy back on track. In reality, real wages are falling, prices are soaring – and the deficit has actually grown under his austerity regime.

And yet the opposition from Labour has been appalling. They have given ground on almost every key issue. Labour has promised to keep to the Tory spending plans if they are elected in May. They won’t roll back any of the changes to education. They claim they will repeal the Health and Social Care Bill, but they won’t scrap PFI, which is bankrupting hospital trusts.

We will be standing candidates in different constituencies across the country. Our plan is not to stand hundreds of candidates, but to get organised in selected key seats to get Left Unity’s message out to potential voters.

We need your support now to help organise election campaigns on the ground. Left Unity’s national council has issued an appeal for £20,000 to fund this work.

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Additional:

Yanis Varoufakis, who is professor of economic theory at the University of Athens, has been appointed as the new Greek Finance Minister. Here is an interview he gave that was broadcast on Russia Today’s “Boom Bust” back on January 12th (a fortnight prior to the election):

And this is Varoufakis speaking two years ago in an address that was presented to the founding assembly of the United Front Against Austerity (UFAA) on October 27, 2012 in New York City:

On February 2nd, the Keiser Report was devoted to analysis of the Greece situation. Reminding us that Greece is insolvent in much the way the banks were and remain insolvent, Max Keiser and Stacy Herbert also highlighted the vital role that Goldman Sachs had played in an earlier deception to hide Greek debt. A scheme which enabled the Greek government of the time to meet the criteria necessary to join the Eurozone:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

At one point in the meeting, during a tense exchange about contingency plans for dog-walkers, [police Chief Inspector] Rhodes let slip that Operation Discuss (the codename for the Bilderberg security operation) had been up and running for 18 months. Residents and journalists shared an intake of breath. “Eighteen months?” The reason for all the secrecy? “Terrorism”.

After 59 years of Bilderberg guests scuttling about in the shadows, ducking lenses and dodging the news, that’s the rationale we’re given? The same rationale, presumably, is behind the Great Wall of Watford, a concrete-and-wire security fence encircling the hotel. As ugly as it is unnecessary, it looks like the kind of thing you throw yourself against in a stalag before being machine-gunned from a watchtower. Appropriately fascistic, you might say, if you regard fascism as “the merger of corporate and government power”, as Mussolini put it.

The same threat of “terrorism” was used to justify the no-pedestrian, no-stopping zones near the venue. The police laid out their logic: they had “no specific intelligence” regarding a terror threat. However, in recent incidents, such as Boston and Woolwich, there had been no intelligence prior to the attack. Therefore the lack of any threat of a terror attack fitted exactly the profile of a terror attack. The lack of a threat was a threat. Welcome to 1984.

So writes Charlie Skelton, who is again one of the only mainstream journalists reporting from this year’s Bilderberg meeting which officially opened yesterday. Skelton, who also has a career as comedy script writer, adding with typically understated irony:

The audience was an odd mix. Half were residents from around the venue worried about the possibility of tyre-damage to a strip of lawn; the other half were journalists from around the world worried about the geopolitical implications of a conference at which BAE, Stratfor and General Petraeus will be discussing “Africa’s challenges”.

Both halves were worried about the funding for the gigantic security operation. The police assured sceptical residents that the conference would be “cost-neutral” for Hertfordshire, thanks in part to a “donation” from the conference organisers. This “donation” will have come, in part at least, from the Bilderberg Association, a registered UK charity that takes “donations” from BP and Goldman Sachs.

So, in a sense, the Herts police are doing charity work for Goldman Sachs. Which must be a comfort for the executives of Goldman Sachs attending the conference: the vice-chairman, a director and the chairman of Goldman Sachs International. They’ve got their charity team out patrolling, keeping the lenses at bay.2

Click here to read his full article entitled “Bilderberg 2013: welcome to 1984” published by the Guardian on Wednesday 5th.

Here is Skelton again reporting a few days earlier on his same Bilderblog, and on this occasion delving deeper into Bilderberg’s wonderful and little known works of charity whilst also pointing out how the timing of this year’s get-together happens to coincide with a long overdue scandal about political lobbying:

If you’ve been wondering who picks up the tab for this gigantic conference and security operation, the answer arrived last week, on a pdf file sent round by Anonymous. It showed that the Bilderberg conference is paid for, in the UK, by an officially registered charity: the Bilderberg Association (charity number 272706).

According to its Charity Commission accounts, the association meets the “considerable costs” of the conference when it is held in the UK, which include hospitality costs and the travel costs of some delegates. Presumably the charity is also covering the massive G4S security contract. Fortunately, the charity receives regular five-figure sums from two kindly supporters of its benevolent aims: Goldman Sachs and BP. The most recent documentary proof of this is from 2008 (pdf), since when the charity has omitted its donors’ names (pdf) from its accounts.

Public education! From an organisation that hides its face in shame behind armed guards and steel cordons. Skelton adds:

If you are concerned about transparency or lobbying, Watford is the place to be next weekend. Whether the delegates reach out to the press and public remains to be seen. Don’t forget, they’ve got their hands full carrying out the good works of Bilderberg. The conference is, after all, run as a charity.

A charity which specialises in helping those most in need of a little corporate lobbying:

It’s a remarkable spectacle – one of nature’s wonders – and the most exciting thing to happen to Watford since that roundabout on the A412 got traffic lights. The area round the hotel is in lockdown: locals are having to show their passports to get to their homes. It’s exciting too for the delegates. The CEO of Royal Dutch Shell will hop from his limo, delighted to be spending three solid days in policy talks with the head of HSBC, the president of Dow Chemical, his favourite European finance ministers and US intelligence chiefs. The conference is the highlight of every plutocrat’s year and has been since 1954. The only time Bilderberg skipped a year was 1976, after the group’s founding chairman, Prince Bernhard of the Netherlands, was caught taking bribes from Lockheed Martin.

Here is the definition of “bribe”: Something, such as money or a favor, offered or given to a person in a position of trust to influence that person’s views or conduct. So surely then, every form of lobbying is a kind of bribery.

Just imagine, for example, if my college discovered that I or any of my colleagues were accepting cash payments (or other ‘gifts’) from students – they would rightly sack us on the spot. Would it make any difference if I told them that the students were only “lobbying me” about their coursework, or would it be deemed more acceptable if I had “registered their interests”? Of course it wouldn’t! So in what way is lobbying not bribery?

That said, some kinds of bribery are more prosecutable than others. So was Prince Bernhard ever criminally charged after accepting a $1.1 million bribe from Lockheed? Of course not, after all he’s Prince Bernhard. Although apparently he was forced “to step down from several public positions and was forbidden to wear his military uniforms again.”4 Rough justice.

Back to Skelton’s comparative analysis of the current goings on at the Grove hotel to the on-going parliamentary scandal:

It may seem odd, as our own lobbying scandal unfolds, amid calls for a statutory register of lobbyists, that a bunch of our senior politicians will be holed up for three days in luxurious privacy with the chairmen and CEOs of hedge funds, tech corporations and vast multinational holding companies, with zero press oversight. “It runs contrary to [George] Osborne’s public commitment in 2010 to ‘the most radical transparency agenda the country has ever seen’,” says Michael Meacher MP. Meacher describes the conference as “an anti-democratic cabal of the leaders of western market capitalism meeting in private to maintain their own power and influence outside the reach of public scrutiny”.

But, to be fair, is “public scrutiny” really necessary when our politicians are tucked safely away with so many responsible members of JP Morgan’s international advisory board? There’s always the group chief executive of BP on hand to make sure they do not get unduly lobbied. And if he is not in the room, keeping an eye out, then at least one of the chairmen of Novartis, Zurich Insurance, Fiat or Goldman Sachs International will be around.

Charlie Skelton is doing an excellent job again this year, and when, later today, I finally make it down to Watford myself, perhaps I’ll happen to run into him. If not then I’d certainly like to express my gratitude to him here before I leave.

I must also say that it is quite pleasing to see others in the media finally picking up the gauntlet and taking serious note of this most extraordinary annual general meeting for globalisation. There was even a surprisingly balanced report on Channel 4 news broadcast yesterday. You can watch it here:

This year’s official list(which is reliably unreliable) has been released and includes amongst many the following names of particular interest:

George Osborne – Chancellor of the Exchequer

Ed Balls – Shadow Chancellor of the Exchequer

Tim Geithner – Former US Secretary of the Treasury

Christine Lagarde – Head of IMF

Peter Sutherland – Chairman of Goldman Sachs

Mario Monti – Former appointed Prime Minister of Italy

Ken Clarke – who is listed merely as “Member of Parliament”

Peter Mandelson – listed as Chairman of Global Council and also Lazard International

José Barroso – President, European Commission

Richard Perle – neo con, veteran warmonger and well known member of PNAC

Henry Kissinger – listed only as “Chairman of Kissinger Associates”

last, but certainly not least, I notice the recently disgraced Gen David Petraeus – why he, we might wonder?

And so to Watford… I’ll definitely be keeping an eye out for Mark Carney who has attended previous meetings at St Moritz (2011) and Chantilly (2012) and is about to replace Mervyn King as the next Governor of the Bank of England.

Tens of thousands of people demonstrated in Madrid on Tuesday September 25, 2012 to protest against the sequestration of popular sovereignty by the banks and “markets”. Repression was once again brutal, leaving dozens of people wounded, and there were numerous arrests.

In this article, Esther Vivas reviews the motivations for this mobilisation and the causes of an ever more brutal police repression.

“They call it democracy but this isn’t one” was the cry repeated in the squares and on the demonstrations. And as time went by, this slogan took on still more meaning. The stigmatisation and repression against those who struggle in the street for their rights has only intensified in recent times. The worse the crisis gets, the more popular support broadens for those who protest and the more the brutal repression increase. The thirst for liberty is being smothered along with the current “democracy”.

Recent days provide a good illustration of this. On Saturday, September 15, 2012, when activists were detained during the demonstration against austerity in Madrid, what was their crime? Carrying a placard with the slogan: “25S: Encircle Parliament”. The next day, two wagon loads of police carried out identity checks on dozens of people in the park at Retiro. The motive? Participating in a preparatory meeting for the said action. Five days later, several of these activists were charged with offences to the highest institutions of the nation and they could be jailed for up to one year.

What were the objectives of the “25S: Encircle Parliament” action? Its appeal expresses them clearly: “Next September 25, we will encircle Parliament to save it from a kidnapping which has transformed this institution into a superfluous body. A kidnapping of popular sovereignty carried out by the Troika and the financial markets and executed with the consent and collaboration of the majority of the political parties”. What will be the form of this action? Its organisers have said and said again: “non-violent”. What kind of fear is it that dictates all these police measures? Fear of violence, or of freedom of expression?

As I said a few months ago at a social centre: “When those at the bottom move, those at the top tremble”. That is the truth. Fear has begun to change sides, even if only partially. The repressive measures, like those we have mentioned, show the fear of those who exert power. The fear that the people rise up, organise, express themselves freely against injustice. The fear of a handful faced with the multitude.

Coup d’état?

The criminalisation of “25S: Encircle Parliament” practically began a month ago when the government representative in Madrid, Cristina Cifuentes, characterised this initiative as a “disguised coup d’état”. The former minister and PSOE deputy José Martínez de Olmos compared the action to the attempted neo-Francoist coup by Tejero in 1981: “Occupying Parliament from the inside as Tejero did or from the outside as some wish on September 25 has the same goal: the sequestration of sovereignty”. Words repeated yesterday by the PP secretary general, Dolores de Cospedal.

Coup d’état? The only putschists here are the financial powers who overthrow governments as they wish and replace them by their trusted henchmen. In Italy they have sidelined Silvio Berlusconi in favour of Mario Monti, a former consultant for the Goldman Sachs bank. In Greece, they have replaced Giorgios Papandreou with Lucas Papadémos, ex-vice president of the European Central Bank. Spanish Economy Minister Luis de Guindos is a former employee of Lehman Brothers. As the journalist Robert Fisk puts it: “The banks and the ratings agencies have become the dictators of the West”. And when the “markets” come in by the door, democracy goes out the window.

It is difficult to believe today that Parliament “represents the popular will”. A good number of ministers and deputies come from private enterprises, others return there as soon as their political careers end. The companies reward them generously for services rendered. Do you remember Eduardo Zaplana? First Minister of Employment, then consultant to Telefonica. Elena Salgado? Vice minister of the Economy, she became a consultant for Abertis. Not to mention Rodrigo Rato, former Economy minister, then director of the International Monetary Fund and finally president of Bankia. His adventures as head of the bank have cost us dear. Without forgetting former prime ministers Felipe Gonzalez and José Maria Aznar, the first becoming a consultant for Gas Natural and the second working for Endesa, News Corporation, Barrick Gold, Doheny Global Group and so on. So it goes.

More democracy

But democracy is, precisely, what the movement of the indignant is demanding, a real democracy in the service of the people and incompatible with the sequestration of politics by the business world or with the Spanish centralism which denies the right of people to self-determination. Paradoxically, it is the protestors who have been deemed to be “anti-democrats”. Anti-democrats for symbolically “besieging” the Catalan parliament on June 15, 2011, during the budget debates which involved austerity measures which had not appeared in any electoral manifesto. Anti-democrats for organising meetings in the squares and stimulating public debate. Anti-democrats for occupying empty housing and putting it to social use. Anti-democrats, definitively, for combating unjust laws and practices.

And when there is more democracy in the street, there is more repression. Fines of 133,000 Euros are demanded by the Ministry of the Interior against 446 activists of 15M in Madrid; 6,000 Euros against 250 students involved in the “Valencia Spring”; hundreds of Euros against activists in Galicia, to mention only a few examples. Along with that, more than a hundred arrests in Catalonia since the general strike on May 29 and a modification of the Criminal Code to criminalise the new forms of protest.

The other face of austerity is the politics of fear and repression. Not so much a social state, as a penal state. Democracy is not on the side of those who claim to exercise it, but rather on the side of those who fight for it. History is full of examples of this, and “25S” will be one of them.

I would like to thank Esther Vivas for allowing me to reproduce this article.

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On Wednesday [Sept 26th], Democracy Now! also reported on the 25S “Occupy Congress” protests which they say led to at least 60 people being injured after police in riot gear had charged against demonstrators with batons and fired rubber bullets.

They spoke with independent journalist Maria Carrion who told them:

Well, as you, as your viewers and listeners have been able to see, it’s a very serious situation here in Spain. This is just the latest of many, many protests that we have been having here in Spain, in the last year, especially, and there will be many more coming. People have lost faith in government. People have lost faith in the main institutions. And we are facing 27 billion euros in social spending cuts.

Every week, the government unveils a series of new measures that affect primarily education and health and salaries and the welfare of Spanish people. And as we saw at the top of the hour, Greece is really an example of what’s coming our way, and that’s why I think people are so enraged and so worried, because they see that none of the measures imposed on Greece on in Portugal or in Ireland are having any sort of effect on the economy, on people’s welfare, on employment. And so, I think people are saying we do not want to head in that same direction.

Well, the PP, the conservative government in power, even before the protests took place, they were already equating them to the 1981 coup d’état here, the military coup d’état that tried to return Spain to a dictatorship. And they, you know, posted 1,400 police in riot gear and even sharpshooters around Congress. So, the disposition—disposition was already there to criminalize protesters. And now what has happened is that those who have been arrested are being charged with crimes against the nation for trying to, what they say, occupy Parliament while in session, which is a crime. They—the, you know, protesters always said, “We’re not occupying. We’re just surrounding Parliament.” But in any case, they are being charged with crimes against the nation, and they will go before a judge, a justice, at Spain’s National Court, which is the court that’s reserved for trying high crimes such as terrorism.

Click here to watch the report or read a full transcript at the Democracy Now! website.

News that the British economy has now entered a dreaded “double-dip recession” is being greeted with surprise from the government, when it ought really to have surprised no-one. That the government’s own dismal failure is immediately reworked into the justification for imposing more ‘austerity measures’ and more quickly, is, again, something we might all have expected.

David Cameron apparently said that the figures were “very, very disappointing”, whilst adding only that the government would stick with its plans and do “everything we can” to generate growth.1 Everything, that is, aside from tackling the real cause of what is actually a worldwide economic depression, by, for instance, re-regulating our own financial markets and also criminally investigating the banks that are responsible for the crisis. And everything except for making significant investments in infrastructure projects and government services that would actually generate useful jobs at union wages.

Austerity isn’t simply cruel, from a national perspective it is suicidal. Just ask the Greeks… or the Italians, or the Irish, or the Spanish, or for that matter, the Argentinians and the Chileans.

Labour leader Ed Miliband said the figures were “catastrophic” and asked Mr Cameron what his excuse was.

“This is a recession made by him and the chancellor in Downing Street. It is his catastrophic economic policy that has landed us back in recession,” Mr Miliband said.

Fair enough, but where are Labour’s alternatives? During the last general election, the choice was between hardcore austerity meted out by the Torys, or softcore austerity from New Labour. How about no austerity! How about closing down the offshore tax-havens and thereby forcing the major corporations to stump up for the deficit. I don’t hear you, Mr Miliband.

The people are very slowly getting wind of what is really going on here. They increasingly see that the bankers have far too much power and influence over our elected representatives. Indeed, Goldman Sacks have blown their cover completely with the dictatorial appointments of Lucas Papademos and Mario Monti in Greece and Italy respectively, not to mention the more recent appointment of Mario Draghi as President of the European Central Bank (ECB). Yet there remains an almost total political vacuum in this country, with no mainstream party prepared even to question, let alone challenge, the steady ‘technocratic’ takeover of our societies.

So I see every reason to repeat an earlier plea for the urgent formation of a new political party. The party I envisage stands for human rights and social justice. It stands for the people and against the established elite. It says defiantly that enough is enough.

*

Economist Michael Hudson spoke about the reasons for the deepening financial crisis on yesterday’s Keiser Report on Russia Today.

In the interview with Max Keiser [part 2 of the show: 13 mins], he explains why the bailouts have failed and, in their current form, must continue to fail. He also points out how there are plenty of alternatives for solving this crisis other than the deathly hammer of ‘austerity’.

*

Here is a previous post, written last summer, which breaks down why ‘austerity measures’ will fail to rescue the economy, whilst presenting a few ideas for alternative measures that would genuinely help to turn the country around.

Ever since I began writing this blog and long before that, one thing has been at the forefront of the political agenda:– “Austerity measures”. The quotation marks are ugly but essential. Those annoying little curly tadpoles hopefully raising the question: what does this phrase actually mean and what is it hiding? Perhaps a dictionary might help us:

Austere: grave, sober, or serious; self-disciplined, abstemious, or ascetic; severely simple or plain. Austerity is then, more often than not, considered ennobling; the word even carries implicitly wholesome religious connotations. The life of a monk is austere. The saints too practiced austerity. And Christ himself is said to have led an austere life. The religious justification is that obsessing about material comforts misses the bigger spiritual picture, but I am not intending to argue either for or against that opinion. My contention here being simply that the meaning of “austerity measures” relies heavily although unconsciously on these traditional ideals. In more purely secular terms, tightening the belt being very often regarded as a good thing.

There is, of course, a constantly expanding menagerie of euphemisms and doublespeak. Civilian casualties in war are now simply “collateral damage”; war itself becoming “kinetic action”; “enemy combatant” meaning a prisoner of war denied their rights; “theater” the war zone; whilst kidnap and torture have been reduced to “extraordinary rendition”. All of these are designed to hide the indefensible truth. But “austerity measures” achieves more again. It doesn’t merely hide the truth, but almost reverses it.

First, let me translate “austerity measures” into useful Standard English: “austerity measures” means enforced poverty. There are no ugly tadpoles required here, because this is quite literally the meaning of the phrase. With the proper words in place, the spell is undone and the truth becomes unavoidable and as clear as day. “Austerity” means being pushed down. Being forced to submit. In short, there is nothing edifying nor ennobling about stripping ordinary people of their very basic and essential public services and economic rights.

“Austerity measures” — what are they good for? Absolutely nothing! You cannot rescue any economy during a depression by impoverishing the people of that country. We can understand this through applying basic economics, or we can find the empirical proof in so many cases where the IMF and the World Bank have applied such “measures” in the past. By making people poorer, personal debt increases as does government debt. As people stop spending, others are forced out of work. The economy shrinks and tax revenues are driven down. Eventually the debt repayments become impossible to maintain. It is a downward death spiral, as the latest report from Greece on Democracy Now! shows all too clearly:

Click here to watch the video or read a full transcript of the same report [from Feb 14th] on the Democracy Now! website.

Greece has now been brought to its knees by imposed “austerity”, and so long as its main political parties continue taking the same course, the situation will quickly worsen. Society is already breaking down and sooner or later the whole political system will surely follow. A revolution in Greece of one kind or another is coming. We can only pray that it’s a good one.

Wherever severe “austerity” moves to next, whether it is Portugal, Ireland, Spain, Italy or here in Britain, the same results must be expected. Oh, and if you think that Greece has a more serious debt problem than anywhere else, then it’s time to think again. Japan has a far higher level of public debt than Greece (see here), and if you also include business and bank debts, then the picture looks very different again. This graphic, published on zerohedge.com [from November 2011] shows very clearly which nation is currently leading in the global debt race to the bottom (and it’s not Greece – not by a long chalk):

Owe your banker £1000 and you are at his mercy; owe him £1 million and the position is reversed. The economist John Maynard Keynes called this ‘the old saying’. So old that it seems to have been long since forgotten. These days, as Keynes would no doubt be surprised to learn, there are some banks deemed simply ‘too big to fail’. Which is, of course, precisely how we got into this mess in the first place, as well as the reason we remain stuck in it.

The ‘megabanks’ have failed, trading poorly, making bad investments and decisions, whilst influencing economic policies in ways that are now proven to be destructive and against the interests of most on the planet, and all the time conducting their operations way beyond their actual means. They are all bankrupt, having “invested” in a load of completely worthless paper which they prefer to call “toxic assets”. And here it is important to understand that in the topsy-turvy world of finance, all debts held are considered to be ‘assets’, even if those debts cannot be repaid, in which case they are regarded as ‘toxic’, whilst remaining as ‘assets’ nonetheless!

The question now being asked is will the latest 130 billion euro bailout save the Greek economy, and the answer to that question is a resounding no. It will no more save the Greek economy than the 110 billion euro bailout did less than two years ago, back in May 2010. Greece will default eventually. Meanwhile the Greek people will have received no benefit from any of these huge bailouts, since the money is only ever used to pay off the bankers’ losses. And yet, when we trace back those losses, what we discover is that they were a product of unquestionably criminal practices. William Black, a highly respected former financial regulator, has explained more than once how the whole financial system became a Ponzi Scheme — and Black is far from a lone voice. Click here to read an earlier post on William Black.

Yet the bankers have so far remained immune from any prosecution. Instead of prison they are receiving continued bailouts, whilst also picking up private perks in the form of bonuses. So how do they get away with it? Simple – they run the show. And evidence of this banker occupation is all around. Goldman Sacks, for instance, are everywhere.

They have not only ‘conquered Europe’, as an extraordinary article in the Independent put it, but long since embedded themselves in other positions of power and influence including, perhaps most significantly, the White House. More recently, they have openly installed unelected puppets to run Greece and Italy. Which is how the Ponzi Scheme that Black and others have uncovered remains officially unchallenged, unhampered and unabated. The bailouts keeping the crooked casino afloat a little longer, whilst the debt contagion spreads far and wide, generating renewed opportunity for asset-stripping along the way. The Greeks are the scapegoats, and also the first victims.

Two years ago, speaking on Al Jazeera, Max Keiser pointed out [7:30 minutes in] that Goldman Sacks had illegally colluded with the Greek government in order to hide debts in their bid for entry into the Eurozone:

The same collusion was more recently picked over in this detailed BBC report from Nick Dunbar, author of “The Devil’s Derivatives”. According to Dunbar’s version of events, however, the secret deal that had been fraudulently cooked up to conceal the true level of Greek government debt was “perfectly legal”:

In his latest book Vultures’ Picnic, investigative journalist, Greg Palast, also delves into Goldman Sacks chicanery. Hidden within documents that he took great pains to authenticate, he discovers evidence that the dodgy deal was a deliberate plan to force the Greek nation into bankruptcy and a fire-sale:

Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for a pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.

I don’t buy it. I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”

I’ll cut to the indictment: Greece is a crime scene. The people are victims of a fraud, a scam, a hustle and a flim-flam. And––cover the children’s ears when I say this––a bank named Goldman Sachs is holding the smoking gun.

You can read a little more about Palast’s investigation, and what it reveals about the Greek crisis here and also on page 27 of chapter one.

There has been a loud call (one that I have also joined in) for the bankers to pay their way in the form of Toban Taxes and so forth, but frankly this is not enough. “Austerity” is too good for bankers. Nothing short of a full criminal investigation is actually needed, with a debt moratorium imposed for as long as that investigation takes. A cancellation of all odious debts should then follow.

Until that time, and as the people of Greece and elsewhere continue to suffer, we would be wise to stand shoulder to shoulder with them. They are the unfortunate recent victims in an ever-expanding and increasingly merciless financial war. For “bailouts” read “more debt”, whilst “austerity measures” means nothing other than economic “shock and awe”.

On the positive side, even parts of the mainstream media are finally beginning to awaken to the crisis now taking hold in Greece and elsewhere. Here, for instance, is Paul Mason, the economics editor for BBC‘s Newsnight, taking a break from his usual duties to speak on Democracy Now! (and to plug his book, obviously) last Wednesday [Feb 22nd]:

Paul Mason appears to be under the unfortunate delusion that only he and Glenn Beck (of all people) are making the connection between the deepening financial crisis and the rise of popular movements across Europe, North Africa and America. If only Mason had figured out how to navigate the internet, he’d be so much better informed.

Click here to watch the video or read a full transcript on the Democracy Now! website.

Additional:

As for the truth about just how lazy the Greek’s really are, here’s a BBC news article from Feb 26th:

But the statistics suggest the country has not lost its way due to laziness. If you look at the average annual hours worked by each worker, the Greeks seem very hard-working.

Out of the 34 members of the OECD, that is just two places behind the board leaders, South Korea.

On the other hand, the average German worker – normally thought of as the very epitome of industriousness – only manages 1,408 hours a year. Germany is 33rd out of 34 on the OECD list (or 24th out of 25 looking at the European countries alone).

Europe’s top 10 and bottom 10

Most hours worked

Most productive

Least hours worked

Least productive

1

Greece

Luxembourg

Netherlands

Poland

2

Hungary

Norway

Germany

Hungary

3

Poland

Ireland

Norway

Turkey

4

Estonia

Belgium

France

Estonia

5

Turkey

Netherlands

Denmark

Czech Rep

6

Czech Rep

France

Ireland

Portugal

7

Italy

Germany

Belgium

Slovakia

8

Slovakia

Denmark

Austria

Greece

9

Portugal

Sweden

Luxembourg

Slovenia

10

Iceland

Austria

Sweden

Iceland

Looking though the table above, you might notice a negative correlation between long working hours and increased productivity. This exposes another pernicious myth, as we can clearly see that it’s far better to work clever than to work hard.

Click here to read the full article which is entitled “Are Greeks the hardest workers in Europe”, written by Charlotte McDonald.

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Click here to add your signature to the statement of solidarity with the people of Greece backed by trade union leaders, members of Parliament and campaigners published in the Guardian.

The people of Greece face an unprecedented economic and political crisis. They are being driven to poverty and mass unemployment by the demands of the so-called Troika – the European Union, the European Central Bank, and the International Monetary Fund which has imposed Lucas Papademos, formerly of Vice-President of the ECB, as Prime Minister.

Hospitals in Greece are running out of basic medicines, nearly half of all young people are unemployed, workers in some sectors have not been paid for months, and many are forced to resort to soup kitchens or scavenge from rubbish dumps.

Now the Troika demands a cut of 23% to the minimum wage, the sacking of tens of thousands of public sector workers and the decimation of pensions which have already lost nearly 50% of their value. International capital is asset stripping an entire country and ripping apart its social fabric.

Greece is at the cutting edge of the austerity measures that are being introduced across Europe. All the evidence shows that while these measures may protect the interests of the rich, they just make matters worse for the majority of the population. What happens in Greece today we will see in Portugal tomorrow and in Ireland the day after. In Britain, the Coalition government is pursuing similar measures which will see workers earnings cut, working longer for a smaller pension, and the dismantling of the NHS along with other public services.

Mikis Theodorakis, famous Greek composer of Zorba’s Dance, and Manolis Glezos, veteran resistance fighter against the Nazi occupation who took down the swastika from the Acropolis during the 2nd World War and replaced it with the Greek flag, have issued a statement calling for a European Front to defend the people of Greece and all those facing austerity.

The Coalition of Resistance and the People’s Charter have decided to support this call and agreed to work with trades unions, campaigns and parties across Europe to establish a European Solidarity Campaign to defend the people of Greece. The campaign aims to organise solidarity and raise practical support for the people of Greece; they cannot be made to pay for a crisis for which they are not responsible.